WASHINGTON—The Senate Finance Committee approved on April 3 the extension of about 50 tax credits, including credits for small businesses that hire veterans and the poor and for businesses that conduct research and development.
Finance Committee Chairman Ron Wyden, D-Ore., sponsored the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act. Most of the tax breaks in the bill expired Dec. 31, 2013, and the bill extends them retroactively to Dec. 31, 2015.
In his opening statement, Mr. Wyden said that, in a perfect world, tax extenders would be unnecessary.
“I know every senator here would rather be marking up a broad-based plan to grow our entire economy, rather than taking this piecemeal approach,” he said. “I want to be straightforward on one point—this will be the last tax extenders bill the committee takes up as long as I'm chairman. That's why the bill is called the EXPIRE Act. It is meant to expire.”
Instead of another tax extenders bill, Mr. Wyden said the committee will begin serious discussions on how to make the most important of these tax breaks a permanent part of the Tax Code.
One extender favored by the Tire Industry Association (TIA) and other small businesses is the Work Opportunity Tax Credit (WOTC). It allows small businesses to claim up to 40 percent of the first $6,000 of wages paid to new hires in eight different groups, including veterans, qualified ex-convicts or those receiving government benefits.
The EXPIRE Act not only extended the WOTC, but the committee voted to broaden the credit in two ways sponsored by Mr. Wyden. First, it added the long-term unemployed to the list of groups from which businesses could hire and claim the credit. Second, it raised the tax credit on newly hired veterans to 100 percent and removed all limits on the size of businesses that could claim the veterans' credit.
Another amendment broadened the reach of the Research & Development Tax Credit. The amendment combined two previous amendments to extend R&D credits to innovative startup firms and allow small businesses to claim the R&D Tax Credit against the Alternative Minimum Tax.
“When startup businesses can keep more of their hard-earned cash, they're able to create the jobs our recovering economy needs,” said Sen. Michael Enzi, R-Wyo., one of the sponsors of the R&D amendment. “This bill provides a great addition to the current R&D tax credit by helping small businesses stay afloat during their early years.”
Also in his opening statement, Mr. Wyden noted the comprehensive bill introduced by the House Ways and Means Committee under Chairman Dave Camp, R-Mich.
“They have offered some fresh, bold ideas, and it's a safe bet that when the next tax reform act becomes law, it will draw a lot from their proposals,” he said.
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