WASHINGTON – The final version of comprehensive tax legislation being negotiated by House and Senate lawmakers will preserve key renewable energy tax credits that were once at risk of being removed, congressional and business sources said on Thursday.
Congressional Republicans reached a deal on tax legislation on Wednesday, clearing the way for final votes next week on a package that would slash the U.S. corporate tax rate to 21 percent and cut taxes for wealthy Americans.
Congressional and business sources briefed on the status of these talks have confirmed that the production tax credit for wind energy and the $7,500 electric vehicle tax credit, which the House version of the bill had targeted, will remain in the final bill.
Lawmakers have been working to produce a tax package after the Republican-controlled House and Senate passed different versions of legislation.
The president of the American Council on Renewable Energy, Gregory Wetstone, sent a note to members on Wednesday saying that he knew “with certainty” that the legislation also did not include the alternative minimum tax (AMT) for corporations that would have reduced the value of the production tax credit (PTC) for wind projects.
Meanwhile, the renewable energy industry is awaiting final details on how congressional negotiators will address problems created by a provision included in the Senate-passed bill called the Base Erosion Anti-Abuse Tax (BEAT). This measure was intended to prevent multinational companies from abusing the tax code but would make tax credits like the PTC for wind less valuable.
This provision would have chilled investment by international companies like Vestas, and banks in the renewable energy sector, industry experts said.
Wetstone said negotiators are working on a fix that would allow the PTC to offset at least 80 percent of the BEAT tax imposed on multinational companies.
Another source briefed on the negotiations said that as much as 90 percent of credits could be used to offset the BEAT tax.
“We are still unclear about the precise terms of deal, but it’s good news for the whole sector,” said Liam Donovan, a lobbyist with Bracewell focused on tax, infrastructure and energy.