Federal

August 26, 2008 (FED) - Renewed Optimism for passage of the Tax Bill when Congress returns in September
Our Washington D.C. insiders report, "Capitol Hill is increasingly quiet and likely to remain so and many of the tax staffs are out of town (in fact the Ways and Means Committee staffs have been temporarily ejected from their offices while they are being repainted). However, the expectation is that completion of the fiscal year 2009 appropriations bills, most likely through a continuing resolution through next spring, and the pending tax extenders/AMT patch and energy bill will be the two highest priorities in September."

The Democratic Leadership of the Congress have indicated that they expect to complete these items and adjourn for the year no later than September 26. Republican Leaders believe the tax issues if not resolved prior to the election recess could force Congress to return in December for a post-election session.

There is renewed optimism for passage of the tax bill based on increasing public pressure for Congress to address the current energy crisis. The pending legislation extends among others some energy related tax incentives, including incentives to encourage the production of alternative fuels, and there is a sense among some on Capitol Hill that Democrats have concluded that these issues must be concluded prior to the election. Speaker Pelosi has indicated she is receptive to legislation that would allow some limited oil exploration along the coasts, but some groups such as the National Taxpayers Union are already voicing opposition to a possible compromise energy bill on the grounds that it might raise taxes.

The tax bill is also likely to contain some relief provisions for the areas of the Midwest affected by the recent floods, and given that the Midwest is an important battleground in the upcoming elections, Members from both Parties are eager to provide assistance to individuals and businesses affected by the floods. The recent flooding from Hurricane Fay may stimulate discussion for relief in the Florida and panhandle states.

In any event, the focus on the tax bill in September will once again be the Senate which has failed on four occasions to adopt a procedural motion, which requires sixty votes, to proceed to consider the legislation. Given the short time frame during which Congress will be in session in September, the tax bill is likely to be negotiated at the very highest levels of the Congressional Leadership. ADP Tax Credit Services in conjunction with other members of NEON (National Employment Opportunity Network) will conduct a Hill Walk on September 18, 2008.

July 22, 2008 (FED) - Senate Majority and Minority Leaders Plan to Push Passage of Tax Extenders Legislation
Leaders of the U.S. Senate are meeting to workout their differences on the Paygo rules and move a Tax Extender Package that includes expired tax provisions including the Research and Development Credit, Katrina-WOTC Hiring Credit, District of Columbia Empowerment Zone, Indian Employment Credit, the deduction of state and local general sales tax, the Alternative Minimum Tax patch, and others. Representatives of ADP Tax Credit Services met with the Legislative Directors for Senator Mitch McConnell (R-KY), Richard Lugar (R-OH) and Senior Tax Advisor for Majority Leader Harry Reid (D-NV) this week to obtain more specific information and press for passage.

The Governors of all 50 states and Puerto Rico urged congressional leaders Wednesday to act on a stalled package of renewable energy and tax incentives, which are attached to a larger tax bill embroiled in a fight over revenue-raising offsets.

"Securing our energy future must be a priority at both the state and federal levels," the Governors wrote House Speaker Pelosi, Senate Majority Leader Reid, House Minority Leader Boehner and Senate Minority Leader McConnell. "We strongly urge you to partner with states by passing legislation on a bipartisan basis to extend expiring renewable energy and energy efficiency tax credits that can be enacted this year, reported Peter Cohn, Budget and Appropriation for the Congressional Daily, Washington D.C.

Time is becoming more of an issue as the congressional agenda is overshadowed by the Presidential Election in November. However, members of Congress are certain a tax extender package will be completed before Congress adjourns for the elections.

July 8, 2008 (FED) - Senate Republican Leadership reaches out to Democratic Leadership
OnSenate Republican leaders sent their Democratic counterparts a letter on July 1 urging them to bring to the floor legislation (H.R. 6049) that would extend expired or expiring tax cuts, including the Research and Development tax credit, Katrina-WOTC Hiring Credit, District of Columbia Empowerment Zone, Indian Employment Credit, and the deduction for state and local general sales taxes.

The letter from Minority Leader Mitch McConnell (R-Ky.) and Finance Committee ranking member Charles Grassley (R-Iowa) to Majority Leader Harry Reid (D-Nev.) and Finance Committee Chairman Max Baucus (D-Mont.) advocated a bipartisan solution to the stalemate over whether to pay (Paygo Rules) for the legislation, but also noted that they remain opposed to paying for extensions of current law. May 15, The House Ways and Means Committee voted 25-12, on a largely partisan basis, to approve a $57 billion bill that would extend a series of temporary tax provisions for an additional year and make a number of other changes throughout the Tax Code, including some energy tax incentive extensions.

April 23, 2008 (FED) - Work Opportunity Tax Credit (WOTC) Program/Hurricane Katrina Eligibility Category and Indian Employment Credit Update
Tax legislation took center stage last week as Senate Finance Chairman Max Baucus (D-MT) and ranking Senate member Charles Grassley (R-IA) introduced a tax bill. Read more...