House approves extending energy tax credits
The House of Representatives passed legislation on Friday extending billions of dollars in tax credits for the solar, wind and biodiesel industries, ending months of uncertainty for renewable energy companies.
The House voted 263 to 171 in favor of the tax breaks Friday as a part of the $700 billion bailout package for Wall Street. This package was overwhelmingly passed by the Senate earlier this week. President George W. Bush will now sign the measure into law.
Legislation to extend the renewable energy tax credits, which were set to expire at the end of the year, had been stalled by a dispute between the House and the Senate over how to pay for the tax breaks.
However, attaching the energy tax credits to the economic rescue package gave them new life.
The legislation extends for one year the production tax credit for wind energy, with an eight-year extension for investment tax credits for businesses and homeowners to install solar energy equipment.
Buyers of plug-in electric cars would receive tax credits ranging from $2,500 to $7,500.
The bill also extends a $1 per gallon production tax credit for biodiesel through 2009. This measure closes a “splash and dash” loophole where companies mixed foreign biofuels with U.S. biodiesel to receive the U.S. subsidy, but then sold the fuel at a discount to European markets.
Renewable energy companies will benefit from the bill’s final approval, as continuing these tax credits is expected to attract hundreds of millions of dollars to those industries. The news of including the tax credits in the bailout package pushed shares of solar energy companies up sharply this week.
In addition to the energy tax breaks, the Senate bill included tax incentives for other businesses and a one-year fix to the Alternative Minimum Tax so millions of Americans will not be subject to higher income taxes.
(Editing by Christian Wiessner)
By Ayesha Rascoe
3 October 2008
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