Three Senate Finance Committee task forces issued reports on expired tax provisions on August 13.
One of the task forces focused on energy recommended that the Energy Efficient Commercial Buildings Deduction be made permanent. NMHC and NAA on June 7 had called upon the Finance Committee’s cost recovery task force to extend and modify the Energy Efficient Commercial Buildings Deduction. This deduction, which expired at the end of 2017, enables owners of buildings with four or more stories to deduct between $0.60 and $1.80 per square foot when they installed certain energy efficient systems, including HVAC, lighting, or building envelope. NMHC and NAA also asked that those engaging in retrofitting multifamily buildings be able to claim the deduction.
A second task force focused on energy provisions did not make any specific recommendations regarding the New Energy Efficient Home Credit that expired at the end of 2017. NMHC also lead a real estate coalition letter asking the Finance Committee’s energy task force to support renewing the New Energy Efficient Home Credit that enables builders of new single-family homes and low-rise multifamily properties (three stories or less) to claim a $2,000 per-unit tax credit for those residences that achieve a 50 percent energy savings for heating and cooling over the 2006 International Energy Conservation Code. NMHC subsequently met with the task force to discuss the provision.
Established by Senate Finance Committee Chairman Charles Grassley (R-IA) and Ranking Member Ron Wyden (D-OR), the task forces were charged with recommending how expired tax provisions should be addressed over the long term given that historically they have only been extended for a year at a two at a time and often retroactively.
Prospects for renewing these two expired tax provisions are unclear, but it is hoped they will be included as part of a year-end tax package., “The next step will be to put together a legislative package based on the proposals that the taskforces received, the areas of consensus among the taskforce members and continued bipartisan discussions,” Chairman Grassley said upon releasing the task force reports. “Taxpayers deserve predictability and clarity, and they haven’t received either for far too long on temporary tax policy. As we work toward that goal, we also shouldn’t lose sight of the provisions that expired more than a year and a half ago. That must be a top priority for Congress upon its return in September.”
Notably, the House Ways and Means Committee on June 20 approved legislation extending these two energy tax provisions through 2020. Chairman Grassley and Ranking Member Wyden last February introduced legislation renewing the provisions through 2019.
For more information on energy efficiency tax deductions, please visit our advocacy page.