James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comFirm Insights
Corporate tax break back in Senate package
Author: James F. McDonough
Date: April 18, 2014
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The Senate tax committee approved a package of so-called tax extenders April 3, according to The Columbus Dispatch. The tax extenders are a collection of special-interest tax breaks that regularly expire and are extended, including breaks for wind energy, Hollywood, teachers, college tuition and more. About 50 temporary tax breaks were extended for two years retroactively after many of them expired at the end of last year, totaling approximately $85 billion in breaks.
Among the tax breaks was one used by large multinational companies to avoid U.S. corporate income tax on capital transfers between offshore units, called the look-through rule, Reuters reported. Two days ago, the committee’s Chairman Ron Wyden, D-Oregon, unveiled legislation to renew the extenders, leaving out the look-through rule. This has been interpreted as a political gesture to show his intention to reduce corporate tax breaks.
Lawmakers were already adding the look-through rule back into the legislation by the time the first meeting was underway, according to the news source.
Wyden has expressed his determination to end the extenders process as a part of a broad tax law overhaul, the Dispatch explained. He recognized, however, that this isn’t going to happen in the immediate future.
“Today, we’ve got to balance short-term needs with long-term goals,” Wyden said, according to the news source. Before the meeting, Wyden expressed that he was, “determined this will be the last extenders bill on my watch.”
The House Ways and Means Committee, which writes taxes, is set to vote on its own extenders package in the coming week, according to the news source. Tax breaks were also renewed for mortgage-insurance costs, railroad maintenance, bonus depreciation and corporate research and development.
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