Legislative update: Finance Committee approves 17 “non-controversial” tax bills

Committee approves 17 “non-controversial” tax bills

The Senate Finance Committee today held a mark-up to approve 17 “non-controversial” tax bills.

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In order to be included on the agenda for today’s mark-up, a bill must have met a number of criteria (as set forth by Chairman Hatch), including having bipartisan support and being non-controversial, having little-to-no budgetary impact, and generating no active opposition from either the Obama Administration or Republican or Democratic Senate leadership.

The bills were all positively reported on a voice vote. Senator Toomey requested that he be recorded as voting “no” on a bill creating a new business investment tax credit for qualified waste-heat-to-power property.

It is unclear when these bills will be considered by the full Senate.

Bills approved

The bills approved by the Finance Committee include:

  • FIRPTA - The bill would, among other changes, allow foreign investors to own up to 10% of the outstanding shares of a publicly traded REIT or RIC with substantial U.S. real estate holdings—a significant increase from the 5% maximum allowed under current law. The bill also includes a provision to increase the generally applicable FIRPTA withholding requirements from 10% to 15% on certain sales and distributions of U.S. real property interests.
  • Waste-heat-to-power investment credit - The bill would expand section 48 to create a 10% business investment credit for qualified waste-heat-to-power property. Generally, the credit would be meant to encourage taxpayers to use the heat generated as a by-product of industrial or commercial processes for the production of electricity. The credit would be available for property placed in service before January 1, 2017, and capacity could not exceed 50 megawatts to qualify.
  • LNG and LPG excise tax - The bill would modify the excise tax rates of liquefied natural gas (LNG) to approximately 14.1 cents per gallon and of liquefied petroleum gas (LPG) to approximately 13.2 cents per gallon. The purposed changes are intended to align the excise tax rates of these commodities with certain other energy commodities based upon energy equivalencies.
  • Tax treatment of certain clean coal power grants - The bill would change the tax treatment of certain clean coal power grants received by some non-corporate entities by clarifying that the grants are excludible from income, provided that the recipient remit an upfront payment of 1.18% of the value of the grant to the federal government.
  • Alternative tax for certain small insurance companies - The bill would modify the eligibility criteria qualifying certain small insurance companies to pay an alternative tax under section 831(b).
In addition, the Finance Committee approved a number of other tax bills concerning:

  • Access to and administration of the U.S. Tax Court
  • Modifications to alcohol bonding requirements
  • Charitable status of agricultural research organizations
  • Tax treatment of income received under student work-learning-service programs
  • Tax treatment of certain compensation received by public safety officers and their dependents
  • Military spouse job continuity credit 
  • Modifications to the excise tax on cider
  • Collection period for taxpayers hospitalized for combat zone injuries
  • Excess business holdings rules for certain philanthropic business holdings of private foundations
  • Use of specified designation by certain enrolled agents
  • Requirements of the IRS to notify exempt organizations before revoking exempt status for failing to file

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