Wednesday, September 24, 2008

Ninth Time Is The Charm--Senate passes renewable energy tax package

Avoiding an end of year sunset of renewable energy tax credits, the senate finally passed (after nine tries) a renewable energy tax package. Wind power tax credits have been extended for one year; other types of renewable energy such as small-scale hydro or tidal power have been extended for two years. Solar tax credits for businesses and residential installations have been extended for eight years. The entire package amounts to $18 billion in tax credits. Bill is available in full--

Today, Chairman of the House Ways and Means Committee, Charles Rangel (D-NY)introduced a bill to offset the cost of the incentives in the Senate bill, which includes a modified version of the previously proposed repeal of the tax exemption for oil and gas producers. In the modified version, the bill would freeze the domestic production deduction for income of taxpayers that is with respect to oil, natural gas or any primary product thereof at 6% (which is current law). Absent this action, this deduction would increase to 9% in 2010. This is a scaled-back version of the provision proposing outright repeal of section 199 with respect to all oil, natural gas or any primary product thereof.

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