Congress passed and President Obama signed a $680 billion tax package, “Protecting Americans from Tax Hikes Act of 2015,” that makes certain tax extenders permanent and renews others for five years and others for tax years 2015 and 2016.
The package does not have offsetting budget cuts or increased revenue to pay for the tax package. There are a number of provisions that were priorities for agriculture. They include:
- Section 179 – Section 179, allowing businesses to expense up to $500,000, is made permanent. The provision also indexes the $500,000 limit for inflation beginning in 2016.
- Biodiesel tax credit – The $1 per gallon blender’s credit for biodiesel is renewed through 2016.
- Cellulosic ethanol – The $1.01 per gallon tax credit for next generation, cellulosic ethanol; and the 30% investment tax credit for ethanol blender pumps are extended through 2016.
- Research and development – The research and development tax credit is permanently extended.
- Bonus depreciation – Extends bonus deprecation for five years through 2019. The bonus depreciation percentage is 50% for property placed in service during 2015, 2016 and 2017, and phases down, with 40% in 2018 and 30% in 2019.