On The Hill

Reed Unveils Bipartisan Bill for Clean Energy Technology Credits

Representative Tom Reed (R-NY) unveiled a bipartisan plan to incentivize clean energy technology innovation and combat climate change. The Energy Sector Innovation Credit is unique from other clean energy credits which specify energy sources credits can be applied to, wind and solar, for example. Instead, the legislation would provide tax credits to energy applications, such as carbon capture technologies, advanced nuclear reactors, offshore wind, and energy storage. Reed hopes this approach will prevent Congress from picking the winners and losers in clean energy while still incentivizing the industry. The legislation includes a slow phase that will sunset the credit as the industry grows. “Hopefully, this shows there are Republicans who want to come to a compromise on climate change and use the tax code in a way that can solve this problem,” Reed stated.^[1]  The bill is being introduced by Reed and Reps. Tom Souzzi (D-NY) and Jimmy Panetta (D-CA) and is currently co-sponsored by Reps. Josh Gottheimer (D-NJ), Darin LaHood (R-IL), and David Schweikert (R-AZ).

U.S. – French DST Negotiations Deadline Approaches

U.S. Treasury Secretary Steve Mnuchin and his French counterpart, Bruno Le Maire, have agreed to double their efforts on discussions surrounding the French digital services tax and U.S. proposed tariffs in hopes of reaching an agreement at the Organization for Economic Cooperation and Development (OECD) by the end of the month. However, it is unlikely they will come to an agreement in the agreed upon 15-days.^[2]  “Can’t be done, and it shouldn’t be done in the next 15 days,” Senate Finance Chairman Chuck Grassley (R-IA) said of the timeline. Grassley also noted that he agrees with taxing business done in other countries, but warned that the digital services tax issue is so complex it will require significant time for negotiation to ensure fairness.

Ways and Means Chairman Urges IRS to Issue Guidance for Tax-Exempt Orgs

On Wednesday (Jan. 8), Ways and Means Committee Chairman Richard Neal (D-MA) and Oversight Subcommittee Chairman John Lewis (D-GA) called on the Internal Revenue Service (IRS) to issue guidance to tax-exempt organizations that paid a 21 percent unrelated business income tax (UBIT) on employee parking and transportation benefits. Congress repealed this provision of the 2017 Tax Cuts and Jobs Act (TCJA) in December.^[3]  In their joint statement, Neal and Lewis call the repealed provision “unfair” to charitable organizations and houses of worship and noted “Congress did our part to right this wrong – now it is time for the IRS to provide tax-exempt organizations with the guidance they need to claim and receive the refunds they are due.” The chairmen also called on IRS Commissioner Charles Rettig to review the requested guidance.

Earned Income Tax Credit and Child Tax Credit Debate Continues

Chairman Neal has his sights set on a floor vote on expanding the Earned Income Tax Credit (EITC) and the Child Tax Credit this year. Democrats have been pushing to widen the reach of these credits for some time. Last year, they attempted to use TCJA corrections on the depreciation schedule for restaurants and retailers as a bargaining chip. Representative Gwen Morre (D-WI) has said her bill to expand EITC and the Child Tax Credit will continue discussions on increasing refundable tax credits for fixes in the TCJA.^[4]  A floor vote would provide the opportunity for open debate on these credits.

References

^[1] Siegal, Josh “House Republican proposes using tax code to combat climate change” The Washington Examiner, 8 Jan. 2020 https://www.washingtonexaminer.com/policy/energy/house-republican-proposes-using-tax-code-to-combat-climate-change

^[2] Palmer, Doug “Tech giants push for tariffs as fight over French tax heats up” Politico Pro, 7 Jan. 2020 https://subscriber.politicopro.com/article/2020/01/internet-giants-back-ustr-plan-for-trump-duties-on-france-185745

^[3] US House of Representatives, Office of Congressman Richard Neal. (2020, January 8). Neal and Lewis Call on IRS to Issue Refund Guidance to Tax-Exempt Organizations Penalized by Harmful GOP Tax Law [Press Release]. Retrieved from https://neal.house.gov/press-releases/neal-and-lewis-call-irs-issue-refund-guidance-tax-exempt-organizations-penalized

^[4] Lorenzo, Aaron. “Neal to Push House Votes on EITC, Child Tax Credit expansions” Politico Pro, 8 Jan. 2020 https://subscriber.politicopro.com/article/2020/01/neal-to-push-house-votes-on-eitc-child-tax-credit-expansions-3975463