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A number of temporary tax provisions expired at the end of 2016. Although some temporary or expired provisions were addressed in the 2017 tax revision (P.L. 115-97), most of the provisions that expired in 2016 have not been extended beyond their 2016 expiration date. Some have suggested that a tax extenders bill enacted early in 2018 could retroactively extend expired tax provisions. Alternatively, another policy option is to allow expired tax provisions to remain expired.
Generally, BBA2018 extended provisions that had expired in 2016 for one year, through 2017. Since BBA2018 was enacted in 2018, it did not extend expired provisions such that they could provide an incentive for taxpayers in the current tax year. With the 2017 tax revision generally becoming effective in 2018, one perspective is that expired tax provisions were extended through 2017, and are now up for reevaluation under the new tax system taking effect in 2018.Table 1 provides information on expiredRevenue measures enacted as part of the Bipartisan Budget Act of 2018 (BBA2018, P.L. 115-123) extended a number of temporary tax provisions that had expired in 2016 or 2017. In the wake of the 2017 tax revision (P.L. 115-97), Congress has indicated an interest in evaluating expired temporary tax provisions or "tax extenders."
Table 1 provides information on temporary tax provisions and "tax extenders." Specifically, the table includes (1) all provisions that expired in 2016 and 2017 and were not addressed in the 2017 tax revision (P.L. 115-97); (2) information on provisions that would bewere extended in BBA2018, including the provisions' current scheduled expiration dates; and (3) for provisions extended in BBA2018, the cost of that extension over the 10-year budget window (FY2018 through FY2027). Before BBA2018, all provisions listed in Table 1 had expired at the end of 2016, except for the Oil Spill Liability Trust Fund excise tax, which had expired at the end of 2017.
extended in the Tax Extender Act of 2017 (S. 2256); and (3) for provisions that were extended for two years, retroactive for 2015 and through 2016, in the Consolidated Appropriations Act, 2016 (P.L. 114-113), the cost of that extension over the 10-year budget window (fiscal years 2016 through 2025). However, with the enactment of P.L. 115-97, the current law tax baseline has substantively changed. Thus, past cost estimates may not necessarily be indicative of the cost of future extensions.
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Provision |
Year Provision Expired |
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Estimated Cost of Extension in |
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Individual |
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Discharge of indebtedness on principal residence excluded from gross income |
2016 |
YES |
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Premiums for mortgage insurance deductible as interest |
2016 |
YES |
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Deduction for qualified tuition and related expenses |
2016 |
YES |
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Business |
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Indian employment credit |
2016 |
Yes |
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Railroad track maintenance credit |
2016 |
Yes |
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Mine rescue team training credit |
2016 |
Yes |
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Three-year depreciation for race horses two years old or younger |
2016 |
Yes |
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Seven-year recovery period for motorsports entertainment complexes |
2016 |
Yes |
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Accelerated depreciation for business property on an Indian reservation |
2016 |
Yes |
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Election to expense advanced mine safety equipment |
2016 |
Yes |
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Special expensing rules for certain film, television, and live theatrical productionsa |
2016 |
Yes |
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Deduction for income attributable to domestic production activities in Puerto Ricob |
2016 |
Yes |
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Special rate for qualified timber gainsc |
2016 |
Yes |
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Empowerment zone tax incentives |
2016 |
Yes |
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Temporary increase in limit on cover over of rum excise tax revenues (from $10.50 to $13.25 per proof gallon) to Puerto Rico and the Virgin Islands |
2016 |
Yes |
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American Samoa economic development credit |
2016 |
Yes |
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Energy |
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Credit for certain nonbusiness energy property |
2016 |
Yes |
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Credit for residential energy property |
2016 |
Yes |
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Credit for qualified fuel cell motor vehicles |
2016 |
Yes |
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Credit for alternative fuel vehicle refueling property |
2016 |
Yes |
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Credit for two-wheeled plug-in electric vehicles |
2016 |
Yes |
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Second generation biofuel producer credit |
2016 |
Yes |
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Incentives for biodiesel and renewable diesel |
2016 |
Yes |
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Beginning-of-construction date for non-wind production tax credit (PTC) facilities |
2016 |
Yes |
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Credit for production of Indian coal |
2016 |
Yes |
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Credit for construction of new energy efficient homes |
2016 |
Yes |
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Energy credit for hybrid solar lighting, geothermal heat pump, small wind, combined heat and power (CHP), fuel cell, and microturbine property |
2016 |
Yes |
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Five-year cost recovery for certain energy property |
2016 |
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Special depreciation allowance for second generation biofuel plant property |
2016 |
Yes |
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Energy efficient commercial buildings deduction |
2016 |
Yes |
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Special rule for sales or dispositions to implement Federal Energy Regulatory Commission ("FERC") or State electric restructuring policy |
2016 |
Yes |
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Incentives for alternative fuel and alternative fuel mixtures |
2016 |
Yes |
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Oil Spill Liability Trust Fund financing rate |
2017 |
Yes |
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Source: Joint Committee on Taxation, List of Expiring Federal Tax Provisions 2016-2027 (JCX-1-18), January 9, 2018; the Tax Extender Act of 2017 (S. 2256); and Joint Committee on Taxation, General Explanation of Tax Legislation Enacted in 2015 (JCS-1-16), March 14, 2016.
Notes: S. 2256 also includes an extension of Qualified Zone Academy Bond authority. However, the authority to issue tax-credit bonds, like the Qualified Zone Academy Bonds, was repealed in P.L. 115-97. and Joint Committee on Taxation, Estimated Budget Effects of the Revenue Provisions Contained in the "Bipartisan Budget Act of 2018," (JCX-4-18), February 8, 2018.
Notes: An "-i-" indicates a cost of less than $50 million. An "—" indicates no revenue cost.
a. Film, television, and live theatrical productions are eligible for additional first-year depreciation if placed in service after September 27, 2017, and before January 1, 2027.
b. The domestic production activities deduction (Section 199) is repealed after 2017.
c. The special rate for qualified timber gains is provided in Internal Revenue Code Section 1201(b). Section 1201 is repealed after December 31, 2017.
d. This special rate for corporate timber gains, enacted for one year in P.L. 114-113, had an estimated revenue cost of $35 million.
e. Empowerment zone tax incentives include designation of an empowerment zone and of additional empowerment zones; empowerment zone tax-exempt bonds; empowerment zone employment credit; increased expensing under Section 179; and nonrecognition of gain on rollovers of empowerment zone investments.
f. Tax credits for residential solar energy property are available until December 31, 2021.
g. The provision had not expired and thus was not extended in P.L. 114-113.
he. The provision was extended through 2021 with a phaseout in 2020 and 2021.
f. Beginning-of-construction date for wind is December 31, 2019.
i. P.L. 115-97 generally provides full and immediate expensing of capital investments placed in service after September 27, 2017, and before January 1, 2023 (with the bonus depreciation amount phased down after this date). Public utility property is generally excluded.
In addition to extending expired provisions as noted in Table 1, the Tax Extender Act of 2017 (S. 2256) proposes to modifyBBA2018 modified the advanced nuclear production tax credit and expandexpanded the tax credit for carbon dioxide sequestration.
Additional background information on extenders generally and descriptions of expired provisions can be found in the following CRS products: