Last night’s State of the Union address offered some interesting new insight into the President’s policy priorities for the upcoming year. I was surprised that the President emphasized tax reform so early and often. While President Obama did not cite the low income housing tax credit, historic tax credit or new markets tax credit directly there was a strong emphasis on providing tax relief for businesses that create domestic jobs. I’m hopeful that this rhetoric will provide an opening to renew the New Markets Tax Credit and perhaps expand other programs as well. A separate proposal to create what amounts to a global alternative minimum tax could create more demand and perhaps a broader investment base for the LIHTC, NMTC, HTC and other investment credits. There was also a strong emphasis on expanding resources for domestic renewable energy and energy efficiency in buildings, both of which could be beneficial for our industry. We’ll know much more about the President’s plans next week when the Administration releases its budget so stayed tuned.
In Congress, negotiations are ongoing to extend the payroll tax cut. I believe this still remains our best short term opportunity to pass Tax Extenders like the New Markets Tax Credit and extend and expand on provisions from HERA to permanently fix the 9% LIHTC at 9%. Senate Majority Leader Harry Reid (D-Nev.) and several other Democrats have urged the conference committee to take on extenders but there is resistance from other members on expanding the scope. At time of press there is still little consensus between Republicans and Democrats on how to pay for the extension of the payroll tax cut, which could scuttle the entire deal. We expand the conference committee to meet again on February 1 and in the meantime private discussions between members will continue to take place.
Questions? Concerns? Please feel free to contact me at 202-939-1753 or tamdur@housingonline.com.
Thom Amdur
Executive Director
