Daily Tax Update - June 15, 2005

Yesterday, House Ways and Means Committee Chairman Bill Thomas (R-CA) said that he would not support a compromise on the funding levels of the highway reauthorization bill as he suggested last week. Instead, Thomas said that the conferees should accept the funding level in the House-passed bill and supported by the Administration. Thomas suggested last week that he might be willing to consider some of the $11 billion in revenue raisers in the Senate bill, which include a provision codifying the economic substance doctrine and a provision requiring that the corporate chief executive officer (CEO) sign a declaration that the corporation’s income tax return complies with federal tax laws.

  • Republican leaders, including House Speaker Dennis Hastert (R-IL) and Majority Leader Tom DeLay (R-TX), have continued to uphold the Administration’s stance in not supporting any bill costing more than the $284 billion in the House bill. Thomas said that the conferees should craft a bill that the President would sign.
  • This is the second week that the House and Senate highway bill conferees have met to try to work out their differences.


  • H.R. 2893 sponsored by Rep. Alcee Hastings (D-FL) would allow a nonrefundable credit against income tax liability for gasoline and diesel fuel used in highway vehicles for nonbusiness purposes.
  • H.R. 2899 sponsored by Rep. Dennis Moore (D-KS) would extend and modify the credit for producing fuel from a nonconventional source.
  • S. 1230 sponsored by Sen. Chuck Grassley (R-IA) would provide for the extension of the Highway Trust Fund and the Aquatic Resources Trust Fund expenditure authority and related taxes and provide for excise tax reform and simplification.
  • S. 1240 sponsored by Sen. Gordon Smith (R-OR) would allow an investment tax credit for the purchase of trucks with new diesel engine technologies.
  • S. 1244 sponsored by Sen. Chuck Grassley (R-IA) would allow individuals a deduction for qualified long-term care insurance premiums, use of such insurance under cafeteria plans and flexible spending arrangements, and a credit for individuals with long-term needs.

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