As we detailed on last Friday’s Advocate, the House of Representatives passed the Build Back Better Act and it proceeds now to the Senate. The House and Senate are in recess this week but will return to Washington next week.
There are a couple of other items in the comprehensive bill to which we wanted to draw your attention. One of these is included in the green energy tax portion of the bill that was crafted by the House Ways & Means Committee and folded into the amended product that is on its way to the Senate. The provision would provide a 30 percent tax credit for consumers purchasing a new wood or pellet stove to heat their home. This credit is uncapped and is applied to the total cost, meaning not only the price of the unit but total installed cost. Biomass heating equipment, as it is known in the bill, has been historically ignored by federal lawmakers supporting renewable energy tax credits and it is encouraging that these highly efficient units that are fueled by sustainable, renewable cord wood or wood pellets made from sawmill residuals is encouraging.
Also on the green energy front, the package includes a generous credit for purchases of commercial electric vehicles. The tax credit is 30 percent of the cost of the vehicle (15 percent if the commercial vehicle is a hybrid) and the credit is authorized for 10 years (December 31, 2021 through December 31, 2031).
For individuals purchasing electric vehicles for personal use, the bill authorizes a refundable income tax credit of up to $8,500 for new electric motor vehicles. Vehicles like vans, SUVs and trucks costing up to 80,000 would qualify as would other types of automobiles in the $55,000 range. The bill also authorizes a credit of up to $7,500 for two- or three-wheeled plug-in electric vehicles. The credit would phase out for taxpayers with adjusted gross income over $500,000 (married taxpayers filing jointly) or $250,000 (single taxpayers). A smaller credit would be available for used electric vehicles the purchase of certain new electric bicycles.
As we have mentioned, this legislation will undergo changes in the Senate as leadership continues to negotiate with moderate Democrats in the upper chamber about contents of a final package. Leader Schumer hopes to have a deal secured and legislation passed by the first week of December, but that deadline will likely slide. ABMA is communicating with key Senate Democrats about our opposition to tax provisions in the House-passed Build Back Better Act that penalize small and medium sized businesses. We are among a large chorus of groups opposing revenue raisers in the bill that make U.S. businesses less competitive.
In addition to the Build Back Better legislation, Congress is focused on a must pass measure to fund the government past December 3 and legislation to address the debt ceiling. Negotiations on all the above will be in hyper drive when Congress returns to Washington after the Thanksgiving holiday.