Senate Moves Toward Passage of Tax Bill: Major Propane Provisions Included

Monday evening, the Senate voted 83-15 on a procedural vote to move toward general debate and eventual passage on an end-of-year tax bill. At press time, the Senate was on schedule to vote on final passage Wednesday afternoon Included in the tax bill are substantial estate tax relief provisions as well as extensions of unemployment benefits, the “Bush tax cuts,” Alternative Minimum Tax relief, and a package of industry-specific tax credit extenders. Within the industry extenders package is an extension of the alternative fuel infrastructure credit and an extension of the fuel tax credit (also made retroactive through 2010) through 2011.

Not included in the Senate industry extenders package is an extension of the alternative fuel vehicle tax credit. As part of their negotiations with the White House at developing the overall compromise, Republicans, led by Senator Kyl (R-AZ), insisted on only including tax credit extensions in areas that had been extended at least once before, ostensibly to bring the cost of the overall package down. Unfortunately, the vehicle tax credit was removed because of this.
Conversations with both House and Senate staff reflect largely the same reality. This negotiated tax package is effectively a “take-it-or-leave-it” deal and any changes – large or small– run the risk of scuttling the whole thing. The Senate is expected to pass the tax bill later today or early tomorrow with little or no amendment. Many House Democrats, on the other hand, are threatening to gut the bill’s estate tax provisions. If successful, this would force the bill back to the Senate which would (most likely) not accept the changes.
It is unclear what the House Democratic Leadership will allow in terms of amendments and what will pass, but any major changes will most likely end the negotiated compromise and create a stalemate. The stakes are high financially. If this tax package is not cleared, virtually all American workers will face larger tax withholding in January and unemployment benefits will ebb away for many. Moreover, many industries such as ours will begin the year without the benefit of any tax credits and face a long political fight to get these measures extended once again in the next Congress.
This has been a long year for the propane industry’s tax credits. First, NPGA successfully fought off an effort to remove forklifts from the fuel tax credit. And when negotiations for this end of the year tax package began, only an extension of the fuel tax credit was on-the table. Expiring vehicle and infrastructure tax credits were going to be punted into the next Congress for consideration. Now, barring unforeseen changes, extensions to the alternative fuel tax credit (with forklifts) and the infrastructure tax credit through 2011 are poised to become law.
We are disappointed that last minute deals excluded an extension to the alternative fuel vehicle tax credit in this bill. Given the fragile nature of the entire tax deal and the looming threats in the House, it is difficult to predict what will exactly happen in the next few days. This said, NPGA, our consultants, industry representatives, and our partners in the natural gas vehicle industry will continue to work on getting the vehicle credit extension added into any final legislation. And what cannot be accomplished by Congress this year, we will certainly be well-positioned to work on successfully in the new 112th Congress.



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