Members of Congress left for the campaign trail on September 30, passing a bill to temporarily fund the federal government just hours prior to a midnight government shutdown. The temporary spending measure funds government operations through December 16, delaying substantive legislation until December.
Lobbyists like myself are preparing for a very active lame duck session after Congress returns to town following the midterm elections on November 8. In addition to passing a spending bill for the Fiscal Year, which began on October 1, Congress will negotiate a defense authorization bill but also (hopefully) address expired tax provisions. The lame duck Congress may try and extend the Research and Development Tax Credit, which, effective Jan. 1, 2022, is amortized instead of allowing for full immediate expensing. We are lobbying for a four-year extension, but may settle for only covering 2022 and 2023.
Another expired provision under consideration is for interest deduction of depreciation and amortization under Section 163(j). The last of the top tax priorities is preventing the phase-down of 100% Bonus Depreciation scheduled to drop to 80% on Jan. 1, 2023.
Congress left town with a lot on its plate to complete upon return. This leaves business waiting until Christmas to find out if lawmakers will give them a lump of coal or continue the tax incentives.