Legislation also includes state and local sales tax deduction and increases small business expensing
Posted on December 16, 2014
“This legislation is good news for jobs all around Tennessee, providing necessary tax breaks for small businesses and families, encouraging investment for more jobs to be created around the country, and allowing for replacement of Chickamauga Lock.” – Lamar Alexander
WASHINGTON, Dec. 16, 2014 - U.S. Sen. Lamar Alexander (R-Tenn.) today voted in favor of the Tax Increase Prevention Act (also known as the tax extenders bill), a comprehensive package of tax provisions that also includes a change in law that would allow for the replacement of Chickamauga Lock to begin as early as 2016. The bill, passed in the Senate by a vote of 76-16, also extends the state and local sales tax deduction and increases small business expensing limits.
“This legislation is good news for jobs all around Tennessee, providing necessary tax breaks for small businesses and families, encouraging investment for more jobs to be created around the country, and allowing for replacement of Chickamauga Lock,” Alexander said. “After many years, this legislation finally presents the third step of my plan that should permit us to begin reconstruction of Chickamauga Lock as early as 2016. This is important not just to Chattanooga, but also to all of East Tennessee because of the number of jobs affected by shipping by river barge.”
The fee increase is the third step in Alexander’s plan, following a change in law that made available more money from the Inland Waterways Trust Fund for projects around the country, and the establishment of Chickamauga Lock as No. 4 on the U.S. Army Corps’ priority list. Passed as a provision of the ABLE Act, today’s legislation would authorize a 9-cent increase in the user fee commercial barge owners pay to use U.S. river locks and navigation channels, which the barge owners themselves have requested. This would provide about $260 million for inland waterways projects across the country over the next 10 years, allowing reconstruction of Chickamauga Lock to begin as early as 2016. The fee increase does not affect recreational boaters who will continue to have free passage through the locks.
“We are almost out of time for a solution – the lock could close in a few years unless more progress is made, throwing 150,000 trucks on I-75 and increasing the cost of shipping goods for Oak Ridge, Y-12, and manufacturers across the state,” Alexander said.
He continued, “In addition to this provision, this bill includes a deduction for state and local sales taxes that will help Tennessee families make ends meet by keeping more money in the pockets of hard-working individuals. This deduction is a matter of fairness for Tennesseans to ensure they are treated the same way the federal government treats those in states with state income tax.”
The state and local sales tax deduction allows residents in states with no state income tax, such as Tennessee, to deduct their state and local sales tax payments from their federal income tax. This puts Tennesseans on equal footing with taxpayers in other states who can deduct their state income taxes from their federal tax obligation. Alexander is a cosponsor of legislation to make the state and local sales tax deduction permanent.
The legislation also includes a provision that extends the increased small business expensing limits, commonly referred to as the Section 179 deduction. “This bill allows small businesses and farmers to deduct the cost of new purchases which encourages more investment so they can continue to create more good jobs in Tennessee,” Alexander said.
Lastly, Alexander said, “It is long past time for Big Wind to stand on its own, and I hope this is the last year Congress extends Washington’s most wasteful tax subsidy, the Wind Production Tax Credit.” Alexander cosponsored an amendment to remove the extension of the Wind Production Tax Credit from the legislation, which the Senate failed to vote on.
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