Update: The Senate on Dec. 17 approved higher Section 179 levels for 2014 as part of a larger tax extenders bill. The bill now moves to President Obama's desk.
Note: Get more Section 179 news - What You Need To Know About Section 179
The U.S. House Wednesday in late afternoon discussion agreed to extend by a 378-46 vote a host of expired tax provisions, including higher section 179 expensing levels, retroactively for 2014.
Agriculture has closely watched the section 179 provision, which in previous years has allowed farm businesses to take the full depreciation deduction of items in the current tax year, with a maximum deduction of $500,000 and a phase-out threshold of $2 million.
Scheduled to fall to $25,000 with a $200,000 phase-out for 2014, the House's bill will return the deduction to previous levels for the 2014 tax year. The bill, H.R. 5771, now moves to the Senate for consideration.
H.R. 5771 follows a failed deal offered by Rep. Dave Camp, R-Mich., that suggested extension of the tax provisions for two years. A presidential veto threat last month was blamed for its demise.
Several lawmakers took issue with one-year time frame offered in H.R. 5771, suggesting it does not allow businesses enough time to make year-end purchases that take advantage of tax benefits, and doesn't improve certainty for 2015.
"At a bare minimum, Congress should be extending these provisions through the end of 2015," he said on the House floor Wednesday, noting that business have spent their money "over the last 11 months" and the remainder of the year is not enough to encourage business investment in machinery, personnel or technology.
House Ways and Means Committee Chairman Camp agreed, but said the one-year extension was a way to move forward. He also disputed Pascrell's comments on funding for the measure, which amounts to about $42 billion.
"These measures have never been paid for," Camp said, making the argument that if they are going to add to the national debt, the nation's business climate should reap the benefits.
"If we are continuing something in a piecemeal fashion, let's just make it permanent so we get the benefits of that provision," Camp said.
Others argued that while the one-year extension was the best solution for the situation at hand, tax issues should be discussed earlier in the year.
"It makes no sense that you have a bill like this 28 days before the end of the year," Jim McDermott, D-Wash., argued. "Next year about this time, we'll be back here with the same deal," he said. "We do not give businesses certainty. If we did, we'd have the economy rolling better."
American Soybean Association President Ray Gaesser, in comments following the vote, expressed similar discontent.
"We were very disappointed that agreement was not reached on a broader measure. That said, we support the House’s passage of their short-term extension in the absence of a more permanent solution," Gaesser said.
Aside from higher Section 179 deduction levels, the bill also provides for bonus depreciation and the biodiesel tax credit, both of which are supported by ASA.