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House Ways And Means Committee Approves Permanent Extension of Research & Experimentation Tax Credit Amongst Other Expired Business Tax Provisions



On April 29th, The House Ways and Means Committee approved six separate bills to permanently extend certain expired business tax provisions. These bills specifically address the research and experimentation tax credit (H.R. 4438); ‘look-through’ treatment for controlled foreign corporations (CFCs) (H.R. 4464); the subpart F exceptions for active financing income (H.R. 4429); increased section 179 ‘small business’ expensing limits (H.R. 4457); a reduced recognition period for S corporation built-in gains (H.R. 4453); and basis adjustments to stock of S corporations making charitable contributions of property (H.R. 4454).

These permanent ‘tax extender’ bills, approved by the Ways and Means Committee without revenue offsets, are estimated by Joint Committee on Taxation (JCT) staff to reduce federal revenues altogether by $310 billion over 10 years.

House Majority Leader Eric Cantor (R-VA) has announced that the full House will vote in May on the bill making the research and experimentation tax credit permanent since its inception into the Internal Revenue Code as a temporary provision back in 1981, with votes to be held in the months ahead on other permanent tax extender bills.

In the Senate, Majority Leader Harry Reid (D-NV) has said he hopes to schedule a Senate floor vote in May on an $85 billion temporary tax extender bill (S. 2260) approved by the Finance Committee on April 3, 2014. S. 2260 would extend more than 50 expired and expiring business and individual provisions, including 50-percent ‘bonus’ depreciation, through the end of 2015. The Finance Committee on April 3 also approved a separate bill (S. 2261) providing technical corrections to tax laws enacted since 2004.

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Peter J. Scalise serves as the Federal Tax Credits & Incentives Practice Leader for Prager Metis CPAs, LLC a member of The Prager Metis International Group. Peter is a highly distinguished BIG 4 Alumni Tax Practice Leader and has approximately twenty years of progressive public accounting experience developing, managing and leading multi-million dollar tax advisory practices on both a regional and national level.

Peter is a highly acclaimed thought leader in the fields of accounting and taxation with deep subject matter expertise in connection to designing, implementing and defending sustainable methodologies for specialty tax incentives including, but not limited to, research tax incentives; orphan drug credits; therapeutic discovery credits; accounting methods and periods; energy tax incentives in connection to green building envelope efficiency and benchmarking, solar energy, bio energies, fuel cells, wind turbines, micro turbines, and geothermal systems; and comprehensive fixed asset analysis incorporating principles of construction tax planning, cost segregation analysis and the final treasury regulations governing tangible property.

Peter is a renowned keynote speaker and an extensively published author on specialty tax incentives, tax controversy matters, and legislative updates from Capitol Hill for NAREIT, AGRION, USGBC, AICPA, ASTP, NATP, ABA, AIA, and TEI. Peter serves as a member of the Tax Faculty for CPAacademy, iShade and TaxConnections University (“TCU”). Peter serves on both the Board of Directors and Board of Editors for The American Society of Tax Professionals (“ASTP”) and is the Founding President and Chairman of The Northeastern Region Tax Roundtable.