Senate Majority Leader Harry Reid (D-Nev.) has tax credit extender legislation that would extend a number of expired tax provisions. The legislation comes in the form of a “strike-all” amendment to H. R. 4154 (The American Workers, State, and Business Relief Act of 2010); which passed the House of Representatives on December 3 on a largely party-line vote. Key provisions include:
Sec. 121. Election for refundable low-income housing credit for 2010
Extends for one year (through 2010) the Section 1602 Exchange Credit, which allows state housing agencies to elect to receive a payment in lieu of a portion of the State’s allocation of low-income housing tax credits. NOTE: The expansion of the Exchange program to include 4%LIHTC/tax-exempt bond deals is not included in this legislation.
Sec. 133. New markets tax credit
Extends for one year (through 2010) the new markets tax credit.
Sec. 183-4. Tax incentives for the Gulf Opportunity Zone
Extends for one year (through 2010) the increased rehabilitation credit for qualified expenditures in the Gulf Opportunity Zone. The Gulf Opportunity Zone Act of 2005 increased the rehabilitation credit from 10 percent to 13 percent of qualified expenditures for any qualified rehabilitated building other than a certified historic structure, and from 20 percent to 26 percent of qualified expenditures for any certified historic structure. This proposal is estimated to cost $25 million over 10 years.
The package of tax extenders is estimated to cost about $31 billion over 10 years. One of the cost offsets included in the bill is codification of the economic substance doctrine. Reports indicate the bill could be considered as early as next week.
