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September 24, 2008

Inhofe Successful in Ensuring Key Oklahoma Priorities Included In Tax Bill

Votes To Extend Beneficial Key Energy, Individual And Business Tax Provisions And Rescue Over 20 Million Americans From Being Subject To The Alternative Minimum Tax

WASHINGTON, D.C. - U.S. Senator Jim Inhofe (R-Okla.) last night voted in favor of tax legislation that includes important tax relief for working families, alternative energy credits and a temporary protection against the Alternative Minimum Tax (AMT). The Senate passed HR 6049-Tax Extenders, as amended, 93-2.

Tax extender legislation is normally passed each year extending a number of beneficial individual and business tax provisions and also protecting over 20 million Americans from the Alternative Minimum Tax. . This vote in favor of the tax package comes after Senator Inhofe fought for months to ensure important provisions were included for Oklahoma.

"I was pleased to vote in favor of legislation that provides important tax relief for America's working families, includes alternative energy incentives, and protects against the Alternative Minimum Tax." Senator Inhofe said. "For months I have been fighting to ensure important provisions for Oklahoma were included in this tax bill and am pleased that Senate Democrats finally put aside partisan politics and brought forward a bill that an overwhelming majority could support. This is the way the American people expect their Congress to conduct business."

The Senate passed bill includes a $64.1 billion AMT patch by increasing the exemption amounts to $44,350 for individuals and $66,250 for those married filing jointly and extends the use of personal credits to be used against the tax when calculating liability. At least 25 million Americans will avoid a tax increase with this patch.

"As Americans increasingly face economic uncertainty, it is irresponsible to short-change this important tax relief. In passing these provisions and an AMT patch we take a real step toward relieving some of the economic burdens shouldered by American families.

"I have long worked to ensure that each year's tax extenders package includes accelerated depreciation of capital assets on Indian lands and the suspension of the net income limitation for energy produced from marginal oil and natural gas wells to keep these wells economically viable and producing.  These two provisions have consistently been included in previous years and are vital to Oklahoma's economy. Now, after months of delay and difficult work to include these provisions, I am happy to join an overwhelming number of Senators in supporting this important bill."

Altogether the package contained nearly 80 different beneficial tax provisions which also include items affecting renewable diesel, refinery expensing, and credits for plugs in electric vehicles.  It extends a two year deduction for state and local sales taxes and the above-the-line deduction for tuition expenses.  It also extends the one year property tax deduction for taxpayers who do not itemize.  It lowers the income threshold for families receiving the $1,000 per child tax credit allowing more families to receive the tax advantage.  Finally, the bill includes a provision which removes restrictions on mental health coverage providing parity with general medical coverage.   

Equally important is the inclusion of the production tax credit which incentivizes the production of wind energy.  Senator Inhofe has long been a Senate leader in support of extending the production tax credit. He also worked to include in the Energy Policy Act of 2005 (EPACT) a provision to dramatically increase private sector investment in high voltage lines by decreasing the depreciation period for these lines to 15 years - further incentivizing wind energy production.

Stuart Solomon, President and COO of Public Service Company of Oklahoma expressed his support for Senator Inhofe's leadership on renewable energy, saying "PSO is grateful to Senator Inhofe for his long leadership and support of renewable energy, and in particular, wind energy. PSO is the largest distributor of wind energy in Oklahoma and we're in the process of adding even more wind energy to our portfolio.  The extension of the renewable production tax credit will help pave the way for our additional wind energy purchases and will allow the wind energy in Oklahoma to continue to grow and prosper.  We greatly appreciate Senator Inhofe's vote today to extend the production tax credit and further the wind industry in our state."

Paul Renfrow, Vice President of Public Affairs for OGE Energy Corp also praised Senator Inhofe, saying, "OG&E was very pleased to learn that the production tax credit for wind power was passed by the Senate today. This vote means that Oklahoma's vast wind power potential is still on track to be developed.   Senator Inhofe's work to include provisions in Congress' Energy Policy Act of 2005 investing in high voltage lines and his consistent leadership extending the production tax credit is only part of his long record not only in support of renewable energy but his long record encouraging the energy production necessary to meet ever increasing demand.  OG&E appreciates Senator Inhofe's continued leadership."

Another key provision important to Senator Inhofe was the inclusion of a provision which allows taxpayers to write off 50% of the costs of facilities that produce cellulosic biofuels.  This is also a provision in Senator Inhofe's American Affordable Fuels Act. 

 

Additional Information

Senator Inhofe's voting record of supporting measures to continue tax relief is unassailable. In his more than a decade of service, Senator Inhofe has voted 25 times to extend individual tax extender provisions, or groups of tax extender provisions.

Eliminating Net Income Limitation on Percentage Depletion Allowance

The net income limitation requires tax percentage depletion to be calculated on a property-by-property basis. The typical independent producer can have numerous oil and gas properties, many of which could be marginal properties with high operating costs and low production yields. The producer may not have net income from a particular property, especially marginal properties. When domestic production is most susceptible to being plugged, the net income limitation discourages producers from maintaining marginal well production. 

Extension of Accelerated Depreciation on Indian Lands

It provides for special accelerated depreciation for new and used assets acquired after December 1993 on Indian reservations and former Indian reservations in Oklahoma.  This depreciation incentive provides an approximately 40 percent shorter recovery period for most commercial property. This accelerated depreciation schedule has been very successful in encouraging capital intensive businesses to locate or expand in Indian Country in Oklahoma and throughout the country.

Extension of the Production Tax Credit (PTC)

Senator Inhofe voted for extension of the PTC in 2006, in 2005, in 2003, in 2002, and 1999.  Every time the extension passed, Inhofe voted in favor of the PTC - demonstrating a strong and consistent record of support.

 

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