Daily Tax Update - December 18, 2013: Baucus Releases Energy Tax Reform Discussion Draft

BAUCUS RELEASES ENERGY TAX REFORM DISCUSSION DRAFT:  Today, Senate Finance Chairman Max Baucus released a tax reform discussion draft on energy which “focuses on streamlining energy tax incentives so they are more predictable and technology-neutral.”  

Senator Baucus said, “Our current set of energy tax incentives is overly complex and picks winners and losers with no clear policy rationale.  We need a system of energy incentives that is more predictable, rational, and technology-neutral to increase our energy security and ensure a clean and healthy environment for future generations.”

A report today said that Senator Baucus is expected to be nominated by the White House to serve as the next U.S. ambassador to China.

The discussion draft offers proposals to:

  • “Establish a new, technology-neutral tax credit for the domestic production of clean electricity
  • Establish a new, technology-neutral tax credit for the domestic production of clean transportation fuel
  • Consolidate almost all of the existing energy tax incentives into these two new credits, with appropriate transition relief
  • Provide businesses and investors with more certainty by making the new incentives long enough to be effective, but phasing them out once clearly defined goals have been met.”

A detailed summary of the energy tax reform staff discussion draft can be found here, and a one-pager on the draft can be found here.

The full staff discussion draft in legislative language can be found here.

SENATE ADVANCES TWO-YEAR BUDGET DEAL:  The Senate on Tuesday voted to end debate on a two-year budget deal in a 67-33 vote, setting the measure up for final passage.

MISCELLANEOUS GUIDANCE RELEASED:

Notice 2014-01 provides guidance on the application of the rules under section 125 of the Internal Revenue Code (Code) (relating to cafeteria plans, including health and dependent care flexible spending arrangements (FSAs)), and section 223 of the Code (relating to health savings accounts (HSAs)), as those two provisions relate to the participation by same-sex spouses in certain employee benefit plans following the Supreme Court decision in United States v. Windsor, 570 U.S. ___, 133 S. Ct. 2675 (2013), and the issuance of Rev. Rul. 2013-17, 2013-38 I.R.B. 201. 

Notice 2014-06 provides guidance on section 45R of the Internal Revenue Code for certain small employers that cannot offer a qualified health plan through a Small Business Health Options Program (SHOP) Exchange because the employer’s principal business address is in a county in Washington or Wisconsin in which a QHP through a SHOP Exchange will not be available for 2014.