U.S. Senate Finance Committee leaders on Feb. 28 introduced legislation to extend the biodiesel tax credit and a variety of other tax provisions that expired in 2017. The legislation provides for a two-year extension covering activities (i.e., biodiesel blending) that occurred in 2018 and 2019.
Although all tax legislation must originate in the House of Representatives, where lawmakers generally support tax extenders but feel less urgency to enact them, the legislation introduced by Sens. Grassley and Wyden will hopefully prompt House leadership to act on extenders more expeditiously.
"We need to get past today so we can chart a course for a reliable future for the tax extenders," Sen. Grassley said.
The House Ways and Means Committee is expected to hold a hearing on tax extenders in the coming weeks. Committee Chairman Richard Neal (D-MA) intends to hold hearings on all tax policies the Committee considers, in large part to draw a stark contrast between Democrats' approach to governing and Republicans' drafting and passing comprehensive tax reform in under two months.
Although NATSO applauds the House's diligent approach to policymaking, many taxpayers need extenders legislation to pass sooner rather than later as we get deeper into tax filing season. The biodiesel tax credit has needed retroactive renewal six times in the past nine years. Uncertainty surrounding the credit has reduced production and blending and limited access to capital for expansions of biofuel operations.
Sen. Grassley indicated that he still supports a long-term phase out of the tax credit over multiple years, but appears to acknowledge that such discussions cannot take place until after a two-year extension occurs.
The Republican House late last year drafted legislation that would phase out the tax credit over seven years, but that effort failed. Supporters hoped tax extenders would find be attached to omnibus funding legislation to keep the government open in mid-February, but that package did not include extraneous policy items.
Legislation focused on carrying the credits through the end of 2019 would give the industry some immediate relief and time to focus on a longer-term solution, Sen. Grassley said.
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