House Sets Vote on Bonus Depreciation Bill

(CCH News Staff, By Stephen K. Cooper, Published July 08, 2014)

House lawmakers on July 10 will vote on a bill to make permanent the Code Sec. 168(k) bonus depreciation provision that allows companies to deduct 50 percent of the cost of capital investments in their first year. Introduced by Rep. Pat Tiberi, R-Ohio, and approved by the House Ways and Means Committee along party lines on May 29 (TAXDAY, 2014/05/30, C.1), HR 4718 would cost $262.9 billion over 10 years, according to a Joint Committee on Taxation estimate (JCX-63-14). A separate provision in the bill would allow companies to accelerate alternative minimum tax (AMT) credits in lieu of bonus depreciation. The JCT estimates that the AMT provision would cost $24.9 billion over a decade.

Democrats on the Ways and Means Committee have repeatedly criticized the legislation because its cost is not offset by spending cuts or other tax increases. They said the bonus depreciation provision was enacted to help speed the nation’s economic recovery and should not be permanently extended. The bill would be effective after December 31, 2013.