CRS Examines Tax Provisions Expiring in 2013

Dozens of temporary tax provisions are scheduled to expire at the end of 2013 under current law. Most of the provisions set to expire in 2013 have been part of past temporary tax extension legislation. Most recently, many temporary tax provisions were extended as part of the American Taxpayer Relief Act (ATRA; P.L. 112-240). Collectively, temporary tax provisions that are regularly extended by Congress -- often for one to two years -- rather than being allowed to expire as scheduled are often referred to as "tax extenders."

Interest in tax reform during the 113^th Congress has led some to believe that tax extenders should be addressed as part of the tax reform process. The President's FY2014 Budget identifies several expiring provisions that should be permanently extended (and in some cases substantially modified), including the research and experimentation (R&D) tax credit, enhanced expensing for small businesses, the renewable energy production tax credit (PTC), the new markets tax credit (NMTC), the work opportunity tax credit (WOTC), the deduction for state and local sales taxes, the exclusion of discharge of principal residence indebtedness, and the tax deduction for energy-efficient commercial buildings. Unlike previous budget proposals during the Obama Administration, the President's FY2014 Budget does not propose or assume that some set of expiring provisions is temporarily extended.

There are several reasons why Congress may choose to enact tax provisions on a temporary basis. Enacting provisions on a temporary basis provides legislators with an opportunity to evaluate the effectiveness of tax policies prior to expiration or extension. Temporary tax provisions may also be used to provide temporary economic stimulus or disaster relief. Congress may also choose to enact tax provisions on a temporary rather than permanent basis due to budgetary considerations, as the foregone revenue from a temporary provision will generally be less than if it was permanent.

The provisions that are scheduled to expire in 2013 are diverse in purpose, including provisions for individuals, businesses, the charitable sector, energy, community assistance, and disaster relief. Among the individual provisions scheduled to expire are deductions for teacher's out-of-pocket expenses, state and local sales taxes, qualified tuition and related expenses, and mortgage insurance premiums. On the business side, under current law, the R&D tax credit, the WOTC, the active financing exceptions under Subpart F, and increased expensing and bonus depreciation allowances will not be available for taxpayers after 2013. Charitable provisions scheduled to expire include the enhanced deduction for contributions of food inventory and provisions allowing for tax-free distributions from retirement accounts for charitable purposes. The renewable energy production tax credit (PTC) is set to expire at the end of 2013, along with a number of other incentives for energy efficiency and renewable and alternative fuels. The new markets tax credit, a community assistance program, is also scheduled to expire at the end of 2013.

A majority of the provisions set to expire at the end of 2013 were temporarily extended as part of ATRA. There were, however, a number of provisions that had previously been included in "tax extenders" legislation that were not extended under ATRA. Moving forward, Congress may choose to address expiring tax provisions as part of tax reform, deciding at that time which temporary provisions should become a permanent part of the tax code. Alternatively, Congress may choose to develop a tax extender package, extending some or all of the provisions that have previously been extended in "tax extender" legislation.

                               Contents

Dozens of temporary tax provisions are scheduled to expire at the end of 2013 under current law. The American Taxpayer Relief Act (ATRA; P.L. 112-240), signed into law on January 2, 2013, reduced tax policy uncertainty by permanently extending most of the tax cuts first enacted in 2001 and 2003 and permanently indexing the alternative minimum tax (AMT) for inflation.¹ ATRA, however, did not eliminate uncertainty in the tax code. Under ATRA, a number of provisions that had been allowed to expire at the end of 2011 or 2012 were temporarily extended through 2013.² Thus, under current law, there remain dozens of temporary tax provisions scheduled to expire at the end of this year.³

Collectively, temporary tax provisions that are regularly extended by Congress rather than being allowed to expire as scheduled are often referred to as "tax extenders." Many of these "tax extender" provisions have been temporarily extended multiple times. The research tax credit, for example, has been extended 15 times since being enacted in 1981. Most of the temporary tax provisions scheduled to expire at the end of 2013 have been extended more than once.

Interest in tax reform during the 113^th Congress has led some to believe that tax extenders should be addressed as part of the tax reform process. Representative Dave Camp, chairman of the House Committee on Ways and Means, has been quoted stating that "all the extenders are issues that we're going to be looking at in tax reform."⁴ The Obama Administration's FY2014 budget also suggests that expiring tax provisions could be addressed as part of tax reform, noting that "the President's proposal for revenue neutral reform would prevent hundreds of billions of dollars from being added to the deficit if the Congress continues to extend temporary business tax incentives without paying for them."⁵

The President's FY2014 budget proposal would permanently extend, and in some cases substantially modify, selected expiring provisions. Among provisions the President's FY2014 budget would make permanent⁶ are the research and experimentation (R&D) tax credit, enhanced expensing for small businesses, the renewable energy production tax credit (PTC), the new markets tax credit (NMTC), the work opportunity tax credit (WOTC), the deduction for state and local sales taxes, the exclusion of discharge of principal residence indebtedness, and the tax deduction for energy-efficient commercial buildings. Unlike previous budget proposals, the President's FY2014 budget does not suggest temporary extension of these selected expiring provisions. The President's FY2013 budget proposed extending most expired and expiring provisions through 2013.

Allowing temporary tax provisions to expire at the end of 2013 does not necessarily mean that these tax provisions will not be available to taxpayers in 2013. In recent years, Congress has chosen to retroactively extend expired tax provisions. Under ATRA, for example, a number of tax provisions that had been allowed to expire at the end of 2011 were retroactively extended through 2013.

The Concept of "Tax Extenders"

The tax code presently contains dozens of temporary tax provisions. In the past, legislation to extend some set of these expiring provisions has been referred to by some as the "tax extender" package. While there is no formal definition of a "tax extender," the term has regularly been used to refer to the package of expiring tax provisions temporarily extended by Congress. Oftentimes, these expiring provisions are temporarily extended for a short period of time (e.g., one or two years). Over time, as new temporary provisions have been routinely extended and hence added to this package, the number of provisions that might be considered "tax extenders" has grown.⁷

Evaluating Expiring Tax Provisions

There are various reasons Congress may choose to enact temporary (as opposed to permanent) tax provisions. Enacting provisions on a temporary basis, in theory, would provide Congress with an opportunity to evaluate the effectiveness of specific provisions before providing further extension. Temporary tax provisions may be also used to provide relief during times of economic weakness or following a natural disaster. Congress may also choose to enact temporary provisions for budgetary reasons. Examining the reason why a certain provision is temporary rather than permanent may be part of evaluating whether a provision should be extended.

Reasons for Temporary Tax Provisions

There are several reasons why Congress may choose to enact tax provisions on a temporary basis. Enacting provisions on a temporary basis provides an opportunity to evaluate effectiveness before expiration or extension. However, this rationale for enacting temporary tax provisions is undermined if expiring provisions are regularly extended without systematic review, as is the case in practice. In 2012 testimony before the Senate Committee on Finance, Dr. Rosanne Altshuler noted that

Tax policy may also be used to address temporary circumstances in the form of economic stimulus or disaster relief, for example. Economic stimulus measures might include bonus depreciation or generous expensing allowances.¹⁰ Various tax policies have also been enacted to provide relief following natural disasters.¹¹ Recent examples of other temporary provisions that have been enacted to address special economic circumstances include the exclusion of mortgage forgiveness from taxable income during the recent housing crisis,¹² the payroll tax cut,¹³ and the Section 1603 grants in lieu of tax credits to compensate for weak tax-equity markets during the economic downturn.¹⁴ It has been argued that provisions that were enacted to address a temporary situation should be allowed to expire once the situation is resolved.¹⁵

Congress may also choose to enact tax policies on a temporary basis for budgetary reasons. If policymakers decide that legislation that reduces revenues must be paid for, it is easier to find resources to offset short-term extensions rather than long-term or permanent extensions.¹⁶ Additionally, by definition the Congressional Budget Office (CBO) assumes under the current law baseline that temporary tax cuts expire as scheduled. Thus, the current law baseline does not assume that temporary tax provisions are regularly extended. Hence, if temporary expiring tax provisions are routinely extended in practice, the CBO current law baseline would tend to overstate projected revenues, making the long-term revenue outlook stronger. Thus, by making tax provisions temporary rather than permanent, these provisions have a smaller effect on the long-term fiscal outlook.¹⁷

Extenders as Tax Benefits¹⁸

Temporary tax benefits are a form of federal subsidy that treat eligible activities favorably compared to others, and channels economic resources into qualified uses. Extenders influence how economic actors behave and how the economy's resources are employed. Like all tax benefits, economic theory suggests every extender can be evaluated by looking at the impact on economic efficiency, equity, and simplicity.¹⁹ Temporary tax provisions may be efficient and effective in accomplishing their intended purpose, though not equitable. Alternatively, an extender may be equitable but not efficient. Policymakers may have to choose the economic objectives that matter most.

Economic Efficiency

Extenders often provide subsidies to encourage more of an activity than would otherwise be undertaken. According to economic theory, in most cases an economy best satisfies the wants and needs of its participants if markets allocate resources free of distortions from taxes and other factors. Market failures, however, may occur in some instances, and economic efficiency may actually be improved by tax distortions.²⁰ Thus, the ability of extenders to improve economic welfare depends in part on whether or not the extender is remedying a market failure. According to theory, a tax extender reduces economic efficiency if it is not addressing a specific market failure.

An extender is also considered relatively effective if it stimulates the desired activity better than a direct subsidy. Direct spending programs, however, can often be more successful at targeting resources than indirect subsidies made through the tax system such as tax extenders.²¹

Equity

A tax is considered to be fair when it contributes to a socially desirable distribution of the tax burden. Tax benefits such as the extenders can result in individuals with similar incomes and expenses paying differing amounts of tax, depending on whether they engage in tax-subsidized activities. This differential treatment is a deviation from the standard of horizontal equity, which requires that people in equal positions should be treated equally.

Another component of fairness in taxation is vertical equity, which requires that tax burdens be distributed fairly among people with different abilities to pay. Most extenders are considered inequitable because they benefit those who have a greater ability to pay taxes. Those individuals with relatively less income and thus a reduced ability to pay taxes may not have the same opportunity to benefit from extenders as those with higher income. The disproportionate benefit of tax expenditures to individuals with higher incomes reduces the progressivity of the tax system, which is often viewed as a reduction in equity.

An example of the effect a tax benefit can have on vertical equity is illustrated by two teachers who have both incurred $250 in classroom-related expenses and are eligible to claim the above-the-line deduction for expenses. Yet the tax benefit to the two differs if they are in different tax brackets. A teacher with lower income, who may be in the 15% income tax bracket, receives a deduction with a value of $37.50, while another teacher, in the 33% bracket, receives a deduction value of $82.50. Thus, the higher-income taxpayer, with presumably greater ability to pay taxes, receives a greater benefit than the lower-income taxpayer.

Simplicity

Extenders contribute to the complexity of the tax code and raise the cost of administering the tax system. Those costs, which can be difficult to isolate and measure, are rarely included in the cost-benefit analysis of temporary tax provisions. In addition to making the tax code more difficult for the government to administer, complexity also increases costs imposed on individual taxpayers. With complex incentives, individuals devote more time to tax preparation and are more likely to hire paid preparers.

The Cost of Extending Expiring Provisions

The Congressional Budget Office (CBO) provides estimated costs of extending all tax provisions scheduled to expire between 2013 and 2023 (see Table 1).²² According to these estimates, over the 2014 to 2023 budget window,

• extending all expiring tax provisions would cost $938.3 billion;

• extending temporary investment incentives (the partial expensing for investment property and Section 179 expensing allowances) would cost $346.1 billion;

• extending expansions to the child tax credit, the earned income tax credit, and the American Opportunity Tax Credit currently scheduled to expire at the end of 2017 would cost $140.4 billion; and

• extending all other expiring tax provisions would cost $451.8 billion.

Since tax extender provisions are assumed to expire as scheduled by CBO, their extension -- even if expected by policymakers -- is not included in CBO's current law revenue baseline. As a result, CBO's revenue projections are higher than actual revenue levels that are likely to occur. Consequently, projected budget deficits under the current law baseline are smaller than actual deficits that are likely to occur. Total federal revenues projected under CBO's May 2013 baseline are $40.3 trillion over the 2014 to 2023 budget window (or 18.9% of Gross Domestic Product (GDP)). Extending all expiring tax provisions would cost an estimated $938.3 billion over the same time period, reducing the 10-year revenue projection by 2% (to $39.4 trillion, or 18.5% of GDP). Extending all expiring tax provisions would increase the 10-year projected budget deficit from 3.0% of GDP to 3.4% of GDP.

Tax Provisions Expiring in 2013

Dozens of temporary tax provisions are scheduled to expire at the end of 2013 (see Table 2). Many of these provisions have been extended as part of previous "tax extender" legislation. For the purposes of this report, expiring provisions have been classified as belonging to one of six categories: individual, business, charitable, energy, community development, or disaster relief. The following sections provide additional details on expiring provisions within each category.

Individual

All but one of the individual provisions scheduled to expire at the end of 2013 have been extended at least once. The longest-standing individual provision that has previously been extended is the above-the-line deduction for classroom expenses incurred by school teachers. This provision was first enacted on a temporary basis in 2002 and has regularly been included in tax extender packages. Other individual provisions that have been extended more than once include the deduction for state and local sales taxes,²⁴ the above-the-line deduction for tuition and related expenses,²⁵ the deduction for mortgage insurance premiums,²⁶ and the parity for the exclusion of employer-provided mass transit and parking benefits.

                    Table 2. Tax Provisions Expiring in 2013

Business

All but one of the business provisions scheduled to expire at the end of 2013 has been extended at least once.²⁸ Most of the business provisions scheduled for expiration in 2013 have been extended more than once. Long-standing provisions that are scheduled for expiration include the research tax credit,²⁹ the rum excise tax cover-over,³⁰ the work opportunity tax credit,³¹ and the active financing exception under Subpart F.³² Bonus depreciation and enhanced expensing allowances, which are often viewed as economic stimulus measures, are also scheduled to expire at the end of 2013.³³

Charitable

The four charitable provisions that are scheduled to expire at the end of 2013 have previously been extended multiple times. Provisions providing an enhanced deduction for non-corporate businesses donating food inventory were first enacted in response to Hurricane Katrina in 2005.³⁴ The remaining charitable provisions set to expire were first enacted as part of the Pension Protection Act of 2006 (P.L. 109-280).³⁵

Energy³⁶

The longest-standing energy-related provision set to expire in 2013 is the renewable energy production tax credit (PTC). This provision was first enacted in 1992.³⁷ Several of the temporary energy-related tax provisions that are scheduled to expire at the end of 2011 were first enacted as part of the Energy Policy Act of 2005 (EPACT05; P.L. 109-58). These include the credit for construction of energy efficient new homes, the credit for energy efficient appliances, the deduction for energy-efficient commercial buildings, and the credit for nonbusiness energy property (also known as the tax credit for energy efficiency improvements for existing homes).³⁸ Certain tax incentives for alternative technology vehicles and alternative fuel vehicle refueling property were also first included in EPACT05.

Community Development

All four of the community development provisions set to expire in 2013 have been extended more than once. Qualified zone academy bonds (QZABs) are tax credit bonds available to state and local governments for elementary and secondary school renovation, equipment, teacher training, and course materials. QZABs were first made available in 1998.³⁹ The New Markets Tax Credit (NMTC), designed to promote investment in low-income and impoverished communities, was first enacted in 2000.⁴⁰ Tax incentives designed to encourage economic activity in the American Samoa and empowerment zones⁴¹ are also scheduled to expire at the end of 2013.

Disaster Relief

The only disaster relief tax provision scheduled to expire in 2013 provides tax-exempt bond financing authority for facilities in the New York Liberty Zone.⁴² Several other temporary disaster relief provisions have been allowed to expire in recent years.⁴³

Tax Extenders in the 112^th Congress

The American Taxpayer Relief Act (ATRA; P.L. 112-240) extended dozens of temporary tax provisions that had expired or were scheduled to expire at the end of 2012 (see Table 3). Many of these provisions were extended retroactively, as they had been allowed to expire at the end of 2011. The 10-year budgetary cost of extending temporary expiring provisions under ATRA was an estimated $73.6 billion.⁴⁴ The largest of these provisions, in terms of revenue cost, were the credit for research and experimentation expenses ($14.3 billion), the extension and modification of the wind production tax credit (PTC) ($12.2 billion),⁴⁵ and the exception under Subpart F for active financing income ($11.2 billion). Information on the cost of extending specific provisions can be found in Table 3.

Several provisions that might have been considered "traditional extenders" -- that is, they had been extended multiple times in the past -- were not extended under ATRA. Two charitable provisions, the enhanced deduction for donations of computer equipment and the enhanced deduction for book inventory to schools, which were first enacted in 1997 and 2005 respectively, were allowed to expire. Other energy-related provisions, including the suspension of 100%-of-net-income limitation on percentage depletion for oil and gas from marginal wells, first enacted in 1997 and the production tax credit (PTC) for refined coal, first enacted in 2004, were also allowed to expire. Tax incentives for ethanol, which were first enacted in 1978,⁴⁶ were also not extended in ATRA, nor were provisions first enacted in 1997 that allowed for expensing of "brownfield" environmental remediation costs. The estate tax look-through rule for regulated investment company (RIC) stock, first enacted in 2004, was also not extended.

A number of other provisions were allowed to expire at the end of 2012. Some of these provisions, such as the Section 1603 grants in lieu of tax credits program⁴⁷ and 100% bonus depreciation,⁴⁸ might have been classified as having been temporary stimulus measures. Amongst the other provisions that were allowed to expire were a number of disaster relief measures, including Gulf Opportunity (GO) Zone provisions and tax provisions related to the 2008 Midwestern Storms and Hurricane Ike.⁴⁹

              Table 3. Temporary Tax Provisions & "Tax Extenders"

² Provisions that had been allowed to expire at the end of 2011 were extended retroactively.

³ In addition to the "tax extenders" discussed in this report, several provisions first enacted as part of the American Recovery and Reinvestment Act (ARRA; P.L. 111-5) were temporarily extended in ATRA.

⁴ Steven Sloan, "Obama Aligns with GOP on Tax Extenders," Politico, April 17, 2013, available at http://www.politico.com/story/2013/04/obama-aligns-with-gop-on-tax-extenders-90170.html.

⁵ Office of Management and Budget, Fiscal Year 2014 Budget of the U.S. Government, Washington, DC. p. 19. Available at http://www.whitehouse.gov/sites/default/files/omb/budget/fy2014/assets/budget.pdf.

⁶ For several of these provisions, the President proposes substantive changes or modifications to existing incentives in addition to making the incentive permanent.

⁷ Several provisions that had been extended in previous "tax extender" packages were allowed to expire and not extended in 2012. For discussion, see the section "Tax Extenders in the 112^th Congress" below.

⁸ U.S. Congress, Senate Committee on Finance, Extenders and Tax Reform: Seeking Long-Term Solutions, Testimony of Dr. Rosanne Altshuler, 112^th Cong., January 31, 2012, available at http://www.finance.senate.gov/hearings/hearing/?id=b1604e2e-5056-a032-52ff-dd661f9280f6.

⁹ See U.S. Government Accountability Office, Biofuels: Potential Effects and Challenges of Required Increases in Production and Use, GAO-09-44, August 2009, http://www.gao.gov/new.items/d09446.pdf and U.S. Government Accountability Office, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue, GAO-11-318SP, March 2011, http://www.gao.gov/assets/320/315920.pdf.

¹⁰ For background on these policies, see CRS Report RL31852, Section 179 and Bonus Depreciation Expensing Allowances: Current Law, Legislative Proposals in the 113^th Congress, and Economic Effects, by Gary Guenther.

¹¹ For more information, see CRS Report R42839, Tax Provisions to Assist with Disaster Recovery, by Erika K. Lunder, Carol A. Pettit, and Jennifer Teefy.

¹² For more information, see CRS Report RL34212, Analysis of the Tax Exclusion for Canceled Mortgage Debt Income, by Mark P. Keightley and Erika K. Lunder.

¹³ For more information, see CRS Report R42103, Extending the Temporary Payroll Tax Reduction: A Brief Description and Economic Analysis, by Donald J. Marples and Molly F. Sherlock.

¹⁴ For more information, see CRS Report R41635, ARRA Section 1603 Grants in Lieu of Tax Credits for Renewable Energy: Overview, Analysis, and Policy Options, by Phillip Brown and Molly F. Sherlock.

¹⁵ This point was made in U.S. Congress, Senate Committee on Finance, Extenders and Tax Reform: Seeking Long-Term Solutions, Testimony of Dr. Rosanne Altshuler, 112^th Cong., January 31, 2012, available at http://www.finance.senate.gov/hearings/hearing/?id=b1604e2e-5056-a032-52ff-dd661f9280f6 and U.S. Congress, House Committee on Ways and Means, Subcommittee on Select Revenue Measures, Framework for Evaluating Certain Expiring Tax Provisions, Testimony of Donald B. Marron, 112^th Cong., June 8, 2012, available at http://waysandmeans.house.gov/uploadedfiles/marron.pdf.

¹⁶ U.S. Congress, House Committee on Ways and Means, Subcommittee on Select Revenue Measures, Framework for Evaluating Certain Expiring Tax Provisions, Testimony of Donald B. Marron, 112^th Cong., June 8, 2012, available at http://waysandmeans.house.gov/uploadedfiles/marron.pdf.

¹⁷ U.S. Congress, Senate Committee on Finance, Extenders and Tax Reform: Seeking Long-Term Solutions, Testimony of Dr. Rosanne Altshuler, 112^th Cong., January 31, 2012, available at http://www.finance.senate.gov/hearings/hearing/?id=b1604e2e-5056-a032-52ff-dd661f9280f6.

¹⁸ This section is adapted from archived CRS report CRS Report RL32367, Certain Temporary Tax Provisions that Expired in December 2009 ("Extenders"), by James M. Bickley.

¹⁹ Using these "criteria for good tax policy" to evaluate tax extenders was discussed in U.S. Congress, House Committee on Ways and Means, Subcommittee on Select Revenue Measures, Framework for Evaluating Certain Expiring Tax Provisions, Testimony of Dr. Jim White, 112^th Cong., June 8, 2012, available at http://waysandmeans.house.gov/uploadedfiles/white.pdf.

²⁰ Market failure occurs when the marginal benefit of an action does not equal the marginal cost. For example, polluting forms of energy production cause social costs that are not taken into account by the producer; hence, there is an argument for taxing this type of energy or, alternatively, subsidizing less polluting firms.

²¹ Stanley S. Surrey, "Tax Incentives as a Device for Implementing Government Policy: A Comparison with Direct Government Expenditures," Harvard Law Review, vol. 83, no. 4 (February 1970), pp. 705-738.

²² CBO provides this estimate to calculate their alternative fiscal scenario. CBO's baseline for spending and revenues assumes current law. Thus, revenue levels under CBO's baseline assume that all tax policies expire as scheduled. The alternative fiscal scenario assumes that current policies remain in place (i.e., expiring tax provisions are extended). The estimated revenues that would be raised from extending certain provisions might change depending on how provisions are stacked (i.e., interaction effects might cause revenue estimates for specific provisions to be higher or lower depending on what other provisions are also assumed to have been extended).

²³ CBO provided detailed information on the budgetary effect of extending expiring provisions as part of the August 2012 baseline. Relative to the number of provisions scheduled to expire at the end of 2013, there are few provisions currently scheduled to expire after 2013. Further, the revenue cost of extending provisions scheduled to expire after 2013 is a small portion of the total revenue cost associated with extending expiring provisions. This data is available at http://www.cbo.gov/publication/43547.

²⁴ For more information, see CRS Report RL32781, Federal Deductibility of State and Local Taxes, by Steven Maguire.

²⁵ For more information, see CRS Report R41967, Higher Education Tax Benefits: Brief Overview and Budgetary Effects, by Margot L. Crandall-Hollick.

²⁶ For general background on housing-related tax benefits, see CRS Report R41596, The Mortgage Interest and Property Tax Deductions: Analysis and Options, by Mark P. Keightley.

²⁷ For more information, see CRS Report RL32620, Health Coverage Tax Credit, by Bernadette Fernandez.

²⁸ The exception is a provision allowing certain race horses three-year depreciation.

²⁹ For more information, see CRS Report RL31181, Research Tax Credit: Current Law and Policy Issues for the 113^th Congress, by Gary Guenther.

³⁰ For more information, see CRS Report R41028, The Rum Excise Tax Cover-Over: Legislative History and Current Issues, by Steven Maguire.

³¹ For more information, see CRS Report RL30089, The Work Opportunity Tax Credit (WOTC), by Christine Scott.

³² For more information, see CRS Report R41852, U.S. International Corporate Taxation: Basic Concepts and Policy Issues, by Mark P. Keightley.

³³ For more information, see CRS Report RL31852, Section 179 and Bonus Depreciation Expensing Allowances: Current Law, Legislative Proposals in the 113^th Congress, and Economic Effects, by Gary Guenther.

³⁴ For more information, see CRS Report RL34608, Tax Issues Relating to Charitable Contributions and Organizations, by Jane G. Gravelle and Molly F. Sherlock.

³⁵ For more information on the provision allowing tax-free distributions from retirement accounts for charitable contributions, see CRS Report RS22766, Qualified Charitable Distributions from Individual Retirement Accounts: A Fact Sheet, by John J. Topoleski.

³⁶ For general background on energy tax policy, see CRS Report R41227, Energy Tax Policy: Historical Perspectives on and Current Status of Energy Tax Expenditures, by Molly F. Sherlock.

³⁷ When first enacted, the PTC was only available for wind and closed-loop biomass technologies. Over time, Congress has expanded the list of qualifying technologies.

³⁸ For more information, see CRS Report R42089, Residential Energy Tax Credits: Overview and Analysis, by Margot L. Crandall-Hollick and Molly F. Sherlock.

³⁹ For more information, see CRS Report R40523, Tax Credit Bonds: Overview and Analysis, by Steven Maguire.

⁴⁰ For more information, see CRS Report RL34402, New Markets Tax Credit: An Introduction, by Donald J. Marples and Sean Lowry.

⁴¹ For background on empowerment zones, see CRS Report R41639, Empowerment Zones, Enterprise Communities, and Renewal Communities: Comparative Overview and Analysis, by Oscar R. Gonzales and Donald J. Marples.

⁴² For general background on tax-exempt bonds, see CRS Report RL30638, Tax-Exempt Bonds: A Description of State and Local Government Debt, by Steven Maguire.

⁴³ For background on disaster-related tax provisions, see CRS Report R42839, Tax Provisions to Assist with Disaster Recovery, by Erika K. Lunder, Carol A. Pettit, and Jennifer Teefy.

⁴⁴ Full details, including the cost of extending individual provisions, can be found in CRS Report R42894, An Overview of the Tax Provisions in the American Taxpayer Relief Act of 2012, by Margot L. Crandall-Hollick.

⁴⁵ In addition to extending the PTC for wind, provisions enacted under ATRA changed the expiration date from a place-in-service deadline to a construction start date. Thus, facilities for which construction begins prior to the deadline qualify for the tax credit. Previously, facilities were required to be placed in service to qualify. This change was made for all qualifying technologies, not just wind.

⁴⁶ Ethanol was given a partial exemption from the gas tax under the Energy Policy Act of 1978 (P.L. 95-618). The exemption was replaced with the Volumetric Ethanol Excise Tax Credit (VEETC) under the American Jobs Creation Act of 2004 (P.L. 108-357).

⁴⁷ For more information, see CRS Report R41635, ARRA Section 1603 Grants in Lieu of Tax Credits for Renewable Energy: Overview, Analysis, and Policy Options, by Phillip Brown and Molly F. Sherlock.

⁴⁸ For more information, see CRS Report RL31852, Section 179 and Bonus Depreciation Expensing Allowances: Current Law, Legislative Proposals in the 113^th Congress, and Economic Effects, by Gary Guenther.

⁴⁹ For more information on temporary tax provisions as disaster relief, see CRS Report R42839, Tax Provisions to Assist with Disaster Recovery, by Erika K. Lunder, Carol A. Pettit, and Jennifer Teefy.