EXPIRE Act of 2014... To Extend or Not to Extend... That is the Question


By Brian Risacher

Only weeks after assuming his position as the new Senate Finance Committee chair, Sen. Ron Wyden (D-Oregon) wasted no time getting down to business, gaining committee approval earlier this past April for a bill addressing the temporary tax incentives known as the “extenders.”

The bill elicited impressive bipartisan support and is slated to provide taxpayers with a definitive two-year extension of several temporary tax incentives and credits that in years past have been shrouded by uncertainty, often hindering taxpayers from making critical business decisions.  The bill will also allow for each provision to be reviewed and considered for permanent adoption within the tax code.  Sen. Wyden noted that the bill, referred to as the Expiring Provision Improvement Reform and Efficiency (EXPIRE) Act, was named accordingly as, “It is meant to expire” and will be the last tax extenders bill reviewed by the committee during his tenure as chairman.

Notable business provisions extended as a result of bill include:

  • Research and experimentation tax credit - as modified
  • Enhanced Section 179 expense and investment limitations (500k and 2M, respectively), including within the definition of qualified property; computer software, qualified leasehold, restaurant, and retail improvements - as modified
  • Inclusion of air conditioning and heating units within the definition of qualifying property under Sec. 179(d)(1)
  • Fifteen-year straight-line cost recovery for qualified leasehold, restaurant, and retail improvements
  • Bonus depreciation – 50%  additional first-year cost recovery
  • Special treatment for Qualified Small Business Stock
  • Work opportunity tax credit - as modified
  • Five-year built-in-gains tax recognition period – S Corporations
  • Alternative fuel and alternative fuel mixtures incentives and credits
  • Alternative fuel vehicle refueling property credit
  • Biodiesel fuel(s) incentives and credits

It should be noted that this is only the first stage of the process, and while certain provision have already been “marked-up” to become permanent and made their way through the House Ways and Means Committee, the road to passage will likely be long and arduous.  The bill’s provisions and progress will continue to be monitored as it makes its way through the House and Senate and conveyed accordingly.

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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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