Congress approved a massive tax and fiscal spending deal that was announced just after midnight on December 16 and we are pleased to report that several key NECA provisions are included in the final deal.
The deal includes two measures: a $1.1 trillion FY 2016 Omnibus appropriations bill that will fund the government through September 30, 2016, and a sweeping $622 billion tax extenders package (known as the Protecting Americans from Tax Hikes (PATH) Act) that goes well beyond the usual one-year look-back provisions we have seen over the past several years.
Together, this legislative package will deliver the predictability, clarity, and certainty NECA contractors have needed for many years. For several years to come, NECA contractors will not have to worry each December whether Congress will take action to extend certain tax relief policies that are necessary for their companies to be successful.
The biggest wins for NECA 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 phasedown of the 30 percent investment tax credit for solar beginning in 2017 to 10 percent in 2022.
In what may be NECA’s biggest win in this deal; the bill includes a two-year deferral on the imposition of the Cadillac Tax that would be imposed on our qualifying health plans.
NECA’s Look Ahead:
The House passed the tax provisions December 17 by a 318-109 vote, with 77 Democrats supporting the legislation and only three Republicans opposing. The House passed the Omnibus appropriations bill on December 18 by a 316-113 vote. The Omnibus was combined with the PATH Act and delivered to the Senate as one package. The Senate passed the final measure on December 18 in a 65-33 vote.
View NECA’s summary of the legislative package
View full bill text for FY 2016 Omnibus Appropriations Bill
View full bill text for the tax extenders deal