Clean Tech Taxcess Tracker
Your update on Energy Tax Incentives
Date: January 25, 2012
Last night, President Obama highlighted various tax legislative priorities in his State of the Union address that are likely to play out on the campaign trail over the next several months. Regarding energy tax specifically, the President called for the enactment of unspecified clean energy tax credits and a national goal of 80 percent of the nation’s electricity by 2035 coming from clean sources such as wind, solar, biomass, hydropower, nuclear power, efficient natural gas, and clean coal. The President also reiterated his stance that incentives for large oil companies should be eliminated.
Although the President did not specifically call for fundamental tax reform in his address, a White House official said last night that the Obama Administration will be releasing its long-awaited corporate tax reform “framework” that will “lower rates and eliminate incentives that policymakers believe make corporations ship jobs overseas.” The official said the framework will likely be released around the time of the FY13 budget, which is scheduled to be submitted on Monday, February 13.
Outlook. In the current legislative environment and especially given the upcoming elections, the proposals generally made last night by President Obama are unlikely to be enacted this year barring some triggering event. That said, there is a chance that certain expired energy tax incentives may be included in the debate regarding unavoidable tax legislative issues early in 2012 including the highway transportation reauthorization that is scheduled to expire at the end of March. If that occurs, however, lawmakers will need to find viable ways to pay for such extensions, which may further delay action on the expired provisions.
That said, the expiration of the 2001 and 2003 tax cuts at the end of 2012 will force lawmakers to address significant tax issues, including expired tax provisions, before the end of the year. We believe that such action is more likely to occur after the November elections in a lame-duck session.
Follow this link for a White House fact sheet on the President’s tax initiatives highlighted last night.