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Tags: Tax Breaks | Internet Tax | Congress | expiration

Congress Must Act or Dozens of Tax Breaks to Expire at Year's End

By    |   Tuesday, 30 September 2014 10:24 AM

While it will be termed a lame-duck session, when Congress returns to business following the election, they have a packed agenda, including dealing with hundreds of tax breaks and exemptions set to expire at the end of 2014, Fox News reports.

After the election, Congress will have to make a decision to extend or let expire more than 50 tax breaks worth nearly $85 billion, including breaks for college tuition, energy-efficient cars and appliances.

Congress departed Washington without extending the provision which allows residents of Texas and six other states that don’t have a state income tax to deduct state and local sales taxes, the Fort Worth Star-Telegram reports.

Taxpayers in states with income taxes are permitted to deduct certain taxes paid to state and local governments.

Although many of the tax breaks are targeted, when Congress returns for its lame-duck session on Nov. 14, one the exemptions on its agenda is a tax break which would impact anyone who uses the Internet.

While Congress has extended a moratorium on Internet taxes, this year it only extended the moratorium through mid-December, the Austin American-Statesman reports.

Lawmakers extended the moratorium on Internet access taxes, which was scheduled to expire on Nov. 1, in the stopgap spending measure they passed in mid-September.

“You have states that have taxes on the books that potentially could be interpreted as applying to Internet access, so even without state legislative action companies could be required to turn on these taxes and collect them from their customers,” said Scott Mackey of KSE Partners at a briefing urging Congress to act, the paper reports.

Congress, which has extended ITFA on a short-term basis three times since 1998, waited until the last minute on the last two occasions. In 2003, Congress failed to meet the deadline, but passed a four-year extension the following year. In 2007, Congress waited until the final days to act before passing a seven-year extension by unanimous votes in both the House and Senate.

While the tax exemption has been extended in previous years and has support across party lines, efforts to combine the legislation with a more controversial bill — the Marketplace Fairness Act (MFA) — could complicate matters, The Hill reports.

The MFA would give individual states the authority to compel online and "remote sellers" to collect sales tax when a transaction is made, just as happens when a sale is made at a brick-and-mortar retailer. In exchange for this authority, states would be required to simplify their tax laws, according to the National Retail Federation.

The MFA is a priority for Senate Majority Leader Harry Reid, who has put it at the top of the chamber's lame-duck agenda, according to The Hill. However, the measure is opposed by several members of his own caucus.

In each chamber, individual committees have taken action to extend a number of tax breaks, but would require votes in the full House and Senate.

The House Ways and Means Committee has voted to extend 14 of the expiring tax breaks, while the Senate Finance Committee also acted earlier this spring.

Oregon Sen. Ron Wyden, who chairs the Senate Finance Committee, renewing his call to take up the EXPIRE Act, after the election.

The EXPIRE Act would extend 26 tax breaks due to expire in 2014, and more than 50 expired tax breaks, including a tax exemption on wind projects, credits that include energy incentives for wind, solar, alternative fueling stations, electric motorcycles, renewable fuels and energy efficiency, and $4,000 tax deduction for tuition costs, according to Wyden.

The Finance Committee approved the legislation by voice vote in April.

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While it will be termed a lame-duck session, when Congress returns to business following the election, they have a packed agenda, including dealing with hundreds of tax breaks and exemptions set to expire at the end of 2014, Fox News reports.
Tax Breaks, Internet Tax, Congress, expiration
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2014-24-30
Tuesday, 30 September 2014 10:24 AM
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