Congress Fails to Extend Tax Credits—For Now

January 7th, 2014 by DWM Magazine

Three tax incentives that have relevance to the door, window and skylight industry were among the 55 allowed to expire at the beginning of 2014, but the door and window industry isn’t ready to write them off just yet.

Ben Gann, director of legislative affairs and grassroots activities for the Window and Door Manufacturers Association (WDMA) says the zest for tax reform was the driving force behind Congress’ failing to extend the tax credits providing for energy-efficient improvements to existing homes (25C), new homes (45L) and to commercial buildings (179D).

“Traditionally, Congress, at the end of each year, has extended expiring tax incentives,” Gann says. “However, the push for comprehensive tax reform has caused a renewed look at all expiring tax incentives and determining which ones should be retained. The interest in comprehensive tax reform has delayed the traditional consideration of a ‘tax extenders’ package at the end of 2013.”

Rich Walker, president and CEO of the American Architectural Manufacturers Association (AAMA), agrees that Congress needs to act now.

“The industry and consumers are far less reliant on federal tax incentives for energy-efficient fenestration purchases than they have been in the past. State-, municipal-, and utility-based programs have picked up the gauntlet on offering real incentives and attractive financing options that are necessary to improve the energy efficiency of both homes and commercial structures across the country,” he says.

Gann remains optimistic that Congress could soon still take action to extend the tax benefits, which are enticing incentives for businesses to continue investing in more energy-efficient products.

“Given that the efforts for comprehensive tax reform appear to be moving on a slower timeline than once thought,” he says, “it’s possible we could see Congress consider a “tax extenders” package in 2014 and make it retroactive to the beginning of this year.”

It would hardly be the first time that has happened.

Both 25C and 45L expired at the end of 2011, Gann says, but at the beginning of 2013, each tax credit was extended through 2013 and made retroactive for 2012.

Tax incentive 179D was last extended in 2008, but also expired at the end of 2013. All three credits were products of the Energy Policy Act of 2005.

Tax credit 179D is one of the most common business deductions because it allows businesses to deduct the purchase price of certain equipment, while reducing federal income tax liability. The credit was meant to stimulate the economy for businesses.

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