The Finance Committee markup is scheduled to begin this morning and the amendment list just released shows there’s lots of pent-up demand for tax policy within the Committee. Over 90 amendments have been filed, which begs the question, “When was the last time the Finance Committee held a markup on tax policy?” Answer – August of 2012. As the old Wolf Brand Chili commercial used to say, “Well, that’s too long!”
There are lots of extenders that benefit S corporations along with other businesses, but two items in particular apply to S corporations only:
- A two-year extension of the shorter, five-year holding period for built in gains; and
- A two-year extension of the provision allowing the full deduction of appreciated property from an S corporation to a charity.
These provisions have long been part of S Corporation Modernization legislation championed by Senators Cardin (D-MD), Hatch (R-UT), and Roberts (R-KS) and S-CORP appreciates their hard work to see them included in the Senate package. As we noted in the previous Wire, nearly the entire S Corporation Modernization bill [sponsored by S-Corp champions Reichert (R-WA) and Kind (D-WI)] was included in Ways and Means Chairman Camp’s discussion draft.
In a statement accompanying the hearing announcement, Chairman Wyden made clear his goal was to adopt a pared-back list of extenders through the end of next year and then use that time to develop and pass a more permanent reform of the tax code:
This bipartisan extenders package is the product of a Finance Committee that came together to provide needed certainty to the economy, protect jobs and maintain important priorities for working families,” Wyden said. “With that said, I am determined this will be the last extenders bill on my watch. It’s high time we focus on creating a new, 21st-century tax code, because the status quo is unacceptable.
Meanwhile, on the House side, the Ways and Means Committee just sent out a notice for a hearing next Tuesday, April 8th, to consider the “Benefits of Permanent Tax Policy for America’s Job Creators.” According to the hearing advisory:
The hearing will explore the value in having stable, permanent tax policy for employers, as well as the problems caused by tax policies that frequently expire and are extended for short periods of time (and often retroactively). To that end, the hearing specifically will consider those expired business tax provisions that are either made permanent or are provided long-term extensions under the discussion draft of the Tax Reform Act of 2014.
Our expectation is that this hearing will be followed by a Committee markup making permanent those “extender” provisions included in the Chairman’s discussion draft.
So the business community is confronted with two significantly different approaches to tax extenders. The Senate approach would extend most of the package through 2015 with a commitment to reform the tax c ode before they need to be extended again, while the House eliminates most extenders and, consistent with the discussion draft, make the rest permanent.
Should be one interesting conference committee, which begs the question: “When was the last time Congress conferenced a tax bill?”