Senate Committee Passes Tax Extenders Legislation
On Tuesday, July 21, the Senate Finance Committee passed a “tax extenders” bill which will extend for two years various tax provisions that expired at the end of 2014. A tax extenders bill is a piece of legislation that continues current and temporary tax breaks in lieu of comprehensive reform legislation.
Included in this bill is an extension for the 9 percent minimum credit rate under the Low-Income Housing Tax Credit (LIHTC). Additionally, the bill would establish a minimum credit rate of 4 percent for property rehabilitation. This is the first time that the 4 percent minimum credit rate has been included in a tax extenders bill. The minimum rates would apply retroactively to the start of 2015 and prospectively for allocations made before January 1, 2017. The 4 percent rate would not apply to bond-financed developments.
During the markup session, Senators Maria Cantwell (D-WA) and Pat Roberts (R-KS) introduced an amendment which would have made the 9 and 4 percent credit rates permanent under the LIHTC program. This is an identical proposal to their bipartisan legislation, S.1139. However, this amendment was not included because the Committee decided not to support amendments that would make temporary provisions permanent.
NAHMA strongly supports the LIHTC provisions of this bill. While permanent establishment of the 9 percent and 4 percent credit rates would have been ideal, it is encouraging that lawmakers understand the need for these credit rates. We will continue to advocate for permanent establishment of the LIHTC rates as Congress continues to work towards a comprehensive tax reform package.
At this time, it is unclear when the full Senate will vote on the bill. The House Ways and Means Committee, which oversees tax policy for the House of Representatives, is also likely to consider legislation extending expired tax provisions this fall.
To read statements by Committee Chairman Orin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR), please click here