WASHINGTON — Today, the U.S. Senate passed a short-term tax extenders bill. The legislation includes one-year extensions of the second-generation biofuel production tax credit and the accelerated depreciation allowance for cellulosic biomass properties, as well as recently expired tax credits for alternative fuel vehicle refueling infrastructure and alternative fuel mixtures. The completed legislation, which was passed by the House of Representatives and now goes to the President for his signature, retroactively applies the incentives to 2014, but does not extend them through 2015. Bob Dinneen, president and CEO of the Renewable Fuels Association, released the following statement:
“Today’s tax extenders package is a step in the right direction. The cellulosic production tax credit will help bolster the emerging cellulosic ethanol industry as plants in Iowa and Kansas are now in production. The alternative fuel vehicle refueling infrastructure tax credit will help expand E85 availability to consumers by assisting gasoline marketers in making the infrastructure investments necessary to enhance greater choice at the pump.
“These incentives can help to level the playing field in a tax code that is overwhelmingly tilted toward incumbent fuels and established oil extraction technologies. In fact, the International Energy Agency’s World Energy Outlook recently found that fossil fuels received an astounding $550 billion in subsidies worldwide last year. In the U.S. specifically, oil companies benefitted from billions in accelerated depreciation, intangible drilling expenses, and countless other tax breaks embedded permanently in the tax code. This drastic imbalance is why fundamental tax reform is so necessary.
“Comprehensive tax reform is also necessary because today’s legislation is a short term solution to a long term problem. Once signed into law, the tax credits will be retroactively applied to 2014 and are only applicable until the end of the month. This once again forces investors and cellulosic ethanol producers to hope for the best but prepare for the worst. Today, Congress should be commended for helping businesses and consumers alike. But next year is a whole new ball game and in order to balance the scales and make future tax incentives truly helpful, Congress must take a good hard look at overarching tax reform legislation.”