List of Temporary Tax Provisions: "Extenders" Expiring in 2005

List of Temporary Tax Provisions: "Extenders" Expiring in 2005

Order Code RS22117
April 19, 2005
CRS Report for Congress
Received through the CRS Web
List of Temporary Tax Provisions:
“Extenders” Expiring in 2005
Pamela J. Jackson
Analyst in Public Sector Economics
Government and Finance Division
Summary
Several temporary tax provisions will expire this year. Often referred to as
“extenders,” these provisions were originally enacted with an expiration date that may
well be extended. Several have been extended numerous times in the past, sometimes
after their expiration date. The extenders provide special tax treatment for certain types
of activities and investment and benefit both individuals and corporations. They occur
in a variety of policy areas including wage credits to support employment of certain
populations; excise taxes on fuel, tires, and other commodities; energy production
incentives; deductions for charitable contributions; special depreciation allowances; and
many others.
A total of 35 temporary tax provisions are expiring in 2005, of which 11 are tax
credits, nine are tax deductions, seven are excise taxes, and eight are other temporary
provisions. All of the provisions, unless otherwise noted, expire on December 31,
2005.
This list will be updated as warranted by legislative changes.
Congressional Research Service { The Library of Congress

CRS-2
Table 1. Expiring Tax Credits
Internal
Revenue
Provision
Code
Section
Personal tax credits allowed against regular tax and alternative minimum
taxa
26(a)(2)
Placed-in-service date for eligibility for tax credit for electricity production
from alternative sourcesa
45(d)(1)-(7)
Work Opportunity Tax Credita
51(c)(4)
Welfare-to-Work Tax Credita
51A(f)
Credit for holders of qualified zone academy bondsa
1397E(e)(1)
Tax credit for first-time D.C. homebuyersa
1400C(i)
Tax credit for research and experimentationa
41(h)
Indian employment tax creditb
45A(f)
Puerto Rico economic activity tax credit
30A(h)
Puerto Rico and possessions tax credit
936 (j) (3)
Election to include combat pay as earned income for purposes of the earned
32 (c)(2)
income tax credit
Note:
a. An overview of this provision is provided in CRS Report RL32367, Temporary Tax Provisions
(“Extenders”) Expired in 2003.
b.An overview of this provision is provided in CRS Report RL32439, Temporary Tax Provisions
(“Extenders”) Expiring in 2004.

CRS-3
Table 2. Expiring Tax Deductions
Provision
Internal
Revenue Code
Section
Expense deduction for elementary and secondary school teachersa
62(a)(2)(D)
Enhanced deduction for corporate contributions of computer equipment
170(e)(6)(G)
for educational purposesa
Expensing of “brownfields” environmental remediation costs a
198(h)
Archer medical savings accounts a
220(i)
Suspension of income limitation on percentage depletion for oil and gas
613A(c)(6)(H)
from marginal wells a
Accelerated depreciation for business property on an Indian reservationb
168(j)(8)
Increase in section 179 expensing
179(b)(1) and (2)
Above-the-line deduction for qualified tuition and related expenses
222(e)
Deduction for state and local general sales taxesc
164(b)(5)
Note:
a. An overview of this provision is provided in CRS Report RL32367, Temporary Tax Provisions
(“Extenders”) Expired in 2003.
b. An overview of this provision is provided in CRS Report RL32439, Temporary Tax Provisions
(“Extenders”) Expiring in 2004.
c. This provision is discussed in CRS Report RL32781, Federal Deductibility of State and Local Taxes,
by Steven Maguire.
Table 3. Excise Tax Provisions
(These provisions expire September 30, 2005, except where noted.)
Provision
Internal Revenue
Code Section
Leaking underground storage tank trust fund
4081(d)(3)
[This provision expired 03/31/05]
Motorboat gasoline and special fuels (used to fund the aquatic
4041(a)
resources trust fund and the land and water conservation fund)a
4081(a)(1)
Highway trust fund:
4041(a)
— Highway gasoline, diesel fuel, kerosene, and special motor
4081 (d)(1)
fuelsa
4051(c)
— Tax on retail sale of heavy highway vehicles
4071(d)
— Tax on heavy truck tires
4481(e)
— Annual use tax on heavy highway vehicles
Partially exempt methanol or ethanol fuel
4041 (m)
Note:
a. All but 4.3 cents-per-gallon is a temporary tax rate; 4.3 cents-per-gallon is permanent.

CRS-4
Table 4. Other Expiring Tax Provisions
Provision
Internal Revenue
Code Section
Tax incentives for D.C. enterprise zone
1400(f)(1)
Tax-exempt D.C. empowerment zone bonds
1400A(b)
Special capital gains rate for investment in D.Ca
1400B(b)(2),
(3)(A), and (4)(A)(i)
Temporary increase in limit on cover over of rum excise tax
7652(f)
revenuesa
Parity in the application of certain mental health benefitsa
9812(f)
Increased Alternative Minimum Tax (AMT) exemption amountb
55(d)(1)
New York Liberty Zone: advance refunding of certain tax-exempt
1400L(e)(1)
bondsb
15-year straight-line cost recovery for qualified leasehold
168(e)(3)(E)(iv) and
improvements and qualified restaurant improvements
(v)
Note:
a. An overview of this provision is provided in CRS Report RL32367, Temporary Tax Provisions
(“Extenders”) Expired in 2003.
b. An overview of this provision is provided in CRS Report RL32439, Temporary Tax Provisions
(“Extenders”) Expiring in 2004.