Tax extenders run into Senate slowdown

 

The nearly $80 billion tax deal has become a temporary victim to the Senate calendar, but supporters are still working on securing a Senate process to advance the package to enactment.

 

The bipartisan, bicameral deal passed the House by an overwhelming margin, giving it substantial momentum headed into the Senate. The bill ran into a Senate logjam, however, as Senate Majority Leader Chuck Schumer spent last week’s floor time trying and failing to advance a supplementary spending and border security bill. The Senate is now in recess, returning on Feb. 26, meaning that late February or the beginning of March are the earliest possible passage windows.

 

Further complicating timing is the fact that government funding runs out in two tranches on March 1 and March 8, making that a likely priority for when the Senate returns. The tax bill could be added to a spending package, but Republican concerns about the bill complicate that possibility.

 

Multiple senators also want to offer amendments, primarily around the child tax credit provisions, and some Republicans are pushing for a full markup in the Senate Finance Committee. Schumer and Senate Finance Committee Chair Ron Wyden, D-Ore., are still considering their procedural options.

 

A markup could slow the process the down, but Wyden and Schumer will likely have to offer some process for amendments at either the committee level or on the floor to secure support for passage. If any amendments are accepted, it could derail the package by upsetting the balance of support and requiring another House vote.  

 

If an amendment process is needed, and the Senate calendar does not change, then that could push passage of the bill until mid-March. However, historically unpredictable political dynamics at the congressional and presidential level could still affect the bill’s chances of becoming law, so proponents will try to push it into law before then. 

 

Grant Thornton Insight

Despite the challenges, the package still enjoys the support of Schumer and the White House and has a reasonable path to enactment. The legislation would have a significant and favorable impact on most businesses but could present administrative and compliance challenges. There are important transition rules and elective options for both retroactive and prospective implementation (see our prior legislative update for more information). Taxpayers should consider assessing the potential impact and evaluating their planning opportunities in preparation for potential enactment.

 

Contact:

 
 
Tax professional standards statement

This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “§,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.

 
 

More tax hot topics