Electric Cars To Biofuels: Here Are All The Energy Tax Breaks Congress Wants To Approve

Source: By MICHAEL BASTASCH, The Daily Caller • Posted: Thursday, December 17, 2015

Congress is poised to pass a $1.1 trillion tax package that extends subsidies for companies producing everything from green energy to electric cars.

For years, Republicans have criticized energy tax breaks for green energy companies, while Democrats have backed ending tax breaks for oil and gas companies. It seemed like Republican-control of Congress would have shattered the hopes of green energy companies to green more taxpayer-funded benefits, but in their rush to lift the ban on oil exports Republicans have agreed to extend tax credits for solar and wind energy.

But wind and solar tax subsidies are just the tip of the iceberg. Congress is set to approve at least 18 tax subsidies applying to the energy industry. Companies can get tax breaks for everything from coal mine safety to biodiesel to green buildings.

The Daily Caller News Foundation has compiled a list of energy tax subsidies Congress wants to keep from expiring this year based on what is listed in the tax bill’s summary document.

1. Biofuel companies make out like bandits

Green energy companies are going to see some massive tax breaks from Congress’ tax extenders bill, especially the biofuels industry which has huge influence in both political parties.

For starters, there are three sections of the bill that apply specifically to biofuels makers. Biofuel makers will not only get tax credits for every gallon of cellulosic biofuels and biodiesel they produce, but they can also get write-offs for building advanced biofuel plants.

“Section 184. Extension of second generation biofuel producer credit. The provision extends through 2016 the credit for cellulosic biofuels producers.”

“Section 185. Extension of biodiesel and renewable diesel incentives. The provision extends through 2016 the existing $1.00 per gallon tax credit for biodiesel and biodiesel mixtures, and the small agri-biodiesel producer credit of 10 cents per gallon. The provision also extends through 2016 the $1.00 per gallon production tax credit for diesel fuel created from biomass. The provision extends through 2016 the fuel excise tax credit for biodiesel mixtures.”

“Section 189. Extension of special allowance for second generation biofuel plant property. The provision extends through 2016 the 50-percent bonus depreciation for cellulosic biofuel facilities.”

2. Wind-fall in subsidies for green energy

Republicans included provisions to extend tax credits for wind energy production and solar panel installations as part of a plan to get Democratic support for lifting the decades-old ban on oil exports.

“Section 187. Extension and modification of credits with respect to facilities producing energy from certain renewable resources. The provision extends the production tax credit for certain renewable sources of electricity to facilities for which construction has commenced by the end of 2016.”

3. Electrifying tax subsidies for cars

The electric car industry and makers of alternative fuels make out pretty well in this tax bill. Not only can companies get tax breaks for having alternative fueling stations, but they can get a huge credit for buying two-wheeled plug-in vehicles.

“Section 182. Extension of credit for alternative fuel vehicle refueling property. The provision extends through 2016 the credit for the installation of non-hydrogen alternative fuel vehicle refueling property. (Under current law, hydrogen-related property is eligible for the credit through 2016.) Taxpayers are allowed a credit of up to 30 percent of the cost of the installation of the qualified alternative fuel vehicle refueling property.”

“Section 183. Extension of credit for 2-wheeled plug-in electric vehicles. The provision extends through 2016 the 10-percent credit for plug-in electric motorcycles and 2-wheeled vehicles (capped at $2,500).”

“Section 192. Extension of excise tax credits relating to alternative fuels. The provision extends through 2016 the 50 cents per gallon alternative fuel tax credit and alternative fuel mixture tax credit.”

“Section 193. Extension of credit for new qualified fuel cell motor vehicles. The provision extends through 2016 the credit for purchases of new qualified fuel cell motor vehicles. The provision allows a credit of between $4,000 and $40,000 depending on the weight of the vehicle for the purchase of such vehicles.”

4. Green home tax credits

Congress also wants to extend tax credits for energy efficiency improvements made to homes and commercial buildings. Well, it’s not as good as it sounds since it is contractors who get the tax credits for making homes more energy-efficient, and not the homeowners.

“Section 190. Extension of energy efficient commercial buildings deduction. The provision extends through 2016 the above-the-line deduction for energy efficiency improvements to lighting, heating, cooling, ventilation, and hot water systems of commercial buildings.”

“Section 188. Extension of credit for energy-efficient new homes. The provision extends through 2016 the tax credit for manufacturers of energy-efficient residential homes. An eligible contractor may claim a tax credit of $1,000 or $2,000 for the construction or manufacture of a new energy efficient home that meets qualifying criteria.”

5. Don’t forget about coal and natural gas

Coal and natural gas companies can also get some tax credits for producing energy and implementing safety programs. Natural gas exporters can also get a nice 50 cent tax credit for every gallon of liquefied gas they sell abroad.

“Section 163. Extension of mine rescue team training credit. The provision extends through 2016 the mine rescue team training tax credit. Employers may take a credit equal to the lesser of 20 percent of the training program costs incurred, or $10,000.”

“Section 168. Extension of election to expense mine safety equipment. The provision extends the election to expense mine safety equipment to property placed in service during 2015 or 2016.”

“Section 186. Extension and modification of production credit for Indian coal facilities. The provision extends through 2016 the $2 per ton production tax credit for coal produced on land owned by an Indian tribe, if the facility was placed in service before 2009. A coal facility is allowed only nine years of credit. The provision modifies the credit beginning in 2016 by removing the placed-in-service-date limitation, removing the nine-year limitation, and allowing the credit to be claimed against the AMT.”

“Section 342. Excise tax credit equivalency for liquefied petroleum gas and liquefied natural gas. The provision converts the measurement of the alternative fuel excise tax credit for liquefied natural gas and liquefied petroleum gas from 50 cents per gallon to 50 cents per energy equivalent of a gallon of diesel fuel, which is approximately 29 cents per gallon for liquefied natural gas and approximately 36 cents per gallon for liquefied petroleum gas. The provision is effective for fuel sold or used after 2015.”

6. Random energy tax extenders

Here are other energy-related tax subsidies for the curious!

“Section 308. Treatment of early retirement distributions for nuclear materials couriers, United States Capitol Police, Supreme Court Police, and diplomatic security special agents. The provision extends the relief under current law, which provides an exception to the 10- percent penalty on withdrawals from retirement accounts before age 50 for public safety officer, to include nuclear materials couriers, United States Capitol Police, Supreme Court Police, and diplomatic security special agents. The provision is effective for distributions after December 31, 2015.”

“Section 191. Extension of special rule for sales or dispositions to implement FERC or State electric restructuring policy for qualified electric utilities. The provision extends through 2016 a rule that permits taxpayers to elect to recognize gain from qualifying electric transmission transactions ratably over an eight-year period beginning in the year of sale (rather than entirely in the year of sale) if the amount realized from such sale is used to purchase exempt utility property within the applicable period.”

“Section 343. Exclusion from gross income of certain clean coal power grants to noncorporate taxpayers. The provision excludes from gross income certain clean power grants received under the Energy Policy Act of 2005 by an eligible taxpayer that is not a corporation. The provision requires an eligible taxpayer to reduce the basis of tangible depreciable property related to such grants by the amount excluded. The provision requires eligible taxpayers to make payments to the Treasury equal to 1.18 percent of amounts excluded under the provision. The provision is effective for grants received in tax years after 2011.”

“Section 181. Extension and modification of credit for nonbusiness energy property. The provision extends through 2016 the credit for purchases of nonbusiness energy property. The provision allows a credit of 10 percent of the amount paid or incurred by the taxpayer for qualified energy improvements, up to $500.”

 

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