Finance

Budget deal renews expired tax breaks

The budget deal that is coming up for a vote on Thursday includes the one-year, retroactive renewal of a host of expired tax breaks.

About 30 tax breaks that expired at the end of 2016 were renewed for 2017, allowing taxpayers to claim them on the 2017 returns they file this year. 

Senate Republicans had pushed for the renewal in 2018 of the tax breaks, known as "extenders." But conservative groups had urged lawmakers against including the extenders in a spending bill, arguing that doing so would have undercut the new tax law.

The tax preferences include those relating to renewable energy, motorsports and race horses.

Rep. Vern Buchanan (R-Fla.), chairman of the House Ways and Means Tax Policy Subcommittee, said that the panel intends to hold hearings on the extenders this year.

The Office of Management and Budget (OMB) said in a statement about the bill that "the Administration is concerned with future extensions of special interest tax deductions and benefits in the wake of tax cuts and reforms that were enacted in December 2017."

Still, the OMB said that Trump would sign the bill if it passes. The legislation also boosts defense and nondefense domestic spending levels and suspends the debt limit until March 2019.

The budget deal also makes a change to the new tax-cut law's tax on college endowments that would benefit a college in Senate Majority Leader Mitch McConnell's (R) home state of Kentucky.

Under the budget bill, colleges with sizable endowments would only be subject to the tax if they had at least 500 tuition-paying students and have more than 50 percent of their tuition-paying students in the U.S. Such a change would be beneficial to Berea College in Kentucky, which enrolls students from low-income households and provides scholarships that cover students' tuition.

The provision benefiting Berea had initially been in the tax bill negotiated by House and Senate Republicans. But it was stripped from the final version for procedural reasons after Democrats challenged it.

McConnell had pledged on the Senate floor in late December to restore the exemption from the endowment tax for Berea.

"We're going to fix this problem," he said.

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