NECA is pleased to report that after several years, NECA’s Advocacy efforts are paying off in a massive tax and fiscal spending deal that was announced.
Congressional negotiators and the White House have finally delivered on both a FY 2016 Omnibus appropriations bill that will fund the government through September 30, 2016 and also a sweeping tax extenders package that goes well beyond the usual one-year lookback provisions we have seen over the past several years.
This legislation delivers predictability, clarity, and certainty for NECA contractors who will no longer have to worry each December if Congress will take action to extend certain tax relief policies. As I mentioned, both measures contain numerous NECA priority issues that we have been advocating for quite some time.
The biggest wins for our contractors include the following:
- Permanent extension for the 15-year straight-line cost recovery for qualified leasehold improvements;
- Permanent extension for qualified restaurant buildings and improvements and qualified retail improvements;
- Permanent extension for the Research and Development credit, with modifications to let qualified small businesses claim it against the alternative minimum tax and their payroll taxes;
- Permanent extension for increased expensing limits under Section 179 of the tax code and the subpart F exception for active financing income.
- A five-year extension of the production tax credit for wind energy with a phaseout to 40 percent by 2019; and,
- A five-year phaseout of the investment tax credit and the "commence construction” eligibility.
In what may our biggest win in this deal, we also were able to successfully gain a two-year deferral on the imposition of the Cadillac Tax that would be imposed on our qualifying health plans.
Here is how we expect the rest of the week to play out: GOP leaders told rank-and-file members that the House will vote on the tax-extenders package on Thursday and the omnibus spending bill on Friday, the last business for Congress before the holidays. Speaker Paul Ryan had hoped to hold votes on both bills on Thursday but since negotiators missed a midnight deadline to unveil the $1.1 trillion spending bill, that vote will be pushed to Friday. The new Speaker has pledged to follow House rules, which state that bills can only be brought to the floor three days after they are introduced so that Members have enough time to read the bills. In the meantime, Congress will need to pass one last stopgap funding measure today to ensure the government stays open. That short-term continuing resolution will run through Dec. 22 to give the Senate enough time to pass both the tax and spending bills.
Please review the attached summary of the legislative package we have developed for your review.