Budget deal is brimming with special tax breaks

The Bipartisan Budget Act that Congress is set to pass Thursday is brimming with tax provisions for a variety of special interests, including racehorse owners, small private colleges and television and film companies.

At least two of the tax breaks help the constituents of Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellThe Hill's 12:30 Report: Trump orders more troops to Mideast amid Iran tensions What if 2020 election is disputed? Immigration bills move forward amid political upheaval MORE (R-Ky.), who negotiated the deal with Democratic Leader Charles SchumerCharles (Chuck) Ellis SchumerNo agreement on budget caps in sight ahead of Memorial Day recess Ex-White House photographer roasts Trump: 'This is what a cover up looked like' under Obama Pelosi: Trump 'is engaged in a cover-up' MORE (N.Y.). 

Altogether, the special tax provisions amount to $17.4 billion over the next four years, with most of the costs incurred — $13.3 billion — in fiscal year 2018, according to an analysis released by the Joint Committee on Taxation (JCT).

ADVERTISEMENT

One provision limits the excise tax on investment income at private colleges and universities to schools with at least 500 tuition-paying students, shielding smaller institutions and costing the government an estimated $2 million a year in revenue over the next decade.

It’s a win for small schools such as Berea College, which is based in Kentucky.

Senate Republicans tried to exempt small colleges such as Berea in the tax-reform bill that passed in December, but the provision was removed after the parliamentarian said it violated procedural rules.

Another provision in the deal extends the three-year tax depreciation for racehorses, allowing owners to depreciate the value of their investment over the most productive span of their racing careers instead of the old seven-year schedule. 

That provision was a top priority of the National Thoroughbred Racing Association, which also happens to be based in McConnell’s home state.  

It also extends special expensing rules for film and television productions, giving a boost to Hollywood, a Democratic fundraising hub, and to live theater productions, a boon to Schumer’s home state of New York.

Schumer has argued that live theater productions should reap the same tax benefits as film and television and warned in the past that without tax incentives, production companies would move away from costly New York City. 

That provision will cost the government $1.3 billion in fiscal year 2018. 

NASCAR track owners will get to share in $37 million in tax benefits thanks to an extension of the seven-year recovery period for motorsports entertainment complexes.

That tax break has been supported by Sen. Debbie StabenowDeborah (Debbie) Ann StabenowCongress: Support legislation to defend Medicare home health  Dems want climate change, tax hikes in infrastructure deal Critics accuse EPA of weakening pollution rule for Pentagon MORE (D-Mich.), one of Schumer’s closest allies. Her state is home to major automobile manufacturers and the Michigan International Speedway.

Sen. Dean HellerDean Arthur HellerThis week: Barr back in hot seat over Mueller report Trump suggests Heller lost reelection bid because he was 'hostile' during 2016 presidential campaign Trump picks ex-oil lobbyist David Bernhardt for Interior secretary MORE (Nev.), who represents the Las Vegas Motor Speedway, Sen. Pat RobertsCharles (Pat) Patrick RobertsWomen's civil rights are not a state issue The Hill's 12:30 Report: Tough questions await Trump immigration plan Pat Robertson: Alabama 'has gone too far' with 'extreme' abortion law MORE (R-Kan.), who has the Kansas Speedway, and Sen. Richard BurrRichard Mauze BurrFive takeaways from Barr's new powers in 'spying' probe The Hill's Morning Report — After contentious week, Trump heads for Japan Trump Jr. slams Republican committee chairman: 'Too weak to stand up to the Democrats' MORE (R), whose home state of North Carolina is a NASCAR hotbed, also support the provision. 

Republican senators won other tax breaks they endorsed. 

Sens. Johnny IsaksonJohn (Johnny) Hardy IsaksonSenate passes disaster aid bill after deal with Trump GOP senators work to get Trump on board with new disaster aid package Senators say they've reached deal on Puerto Rico aid MORE (R-Ga.), Tim ScottTimothy (Tim) Eugene ScottT.I., Charlamagne Tha God advocate for opportunity zones on Capitol Hill Senate confirms controversial 9th Circuit pick without blue slips Spicer defends Trump's White House correspondents dinner boycott MORE (R-S.C.) and Lindsey GrahamLindsey Olin GrahamTrump declassification move unnerves Democrats Climate change is a GOP issue, too New Yorker cover titled 'The Shining' shows Graham, McConnell, Barr polishing Trump's shoes MORE (R-S.C.) scored with the inclusion of an energy tax credit for advanced nuclear power facilities, which will cost $12.2 billion in 2018.

Sen. Chuck GrassleyCharles (Chuck) Ernest GrassleyTrump-Pelosi fight threatens drug pricing talks Overnight Health Care — Presented by PCMA — Senators unveil sweeping bipartisan health care package | House lawmakers float Medicare pricing reforms | Dems offer bill to guarantee abortion access Bipartisan senators reveal sweeping health care package MORE (R-Iowa), a champion of whistleblowers, will be happy about a provision unifying the tax treatment of awards to people who uncover corruption. That and language clarifying whistleblower awards will cost $187 million over 10 years.  

The bill provides $594 million in tax relief for people affected by the devastating California wildfires, including an employee retention tax credit for employers who suffered losses such as wineries in North California. 

It’s a victory for Sen. Dianne FeinsteinDianne Emiel FeinsteinFive takeaways from Barr's new powers in 'spying' probe Senate Democrats to House: Tamp down the impeachment talk Feinstein, Iranian foreign minister had dinner amid tensions: report MORE (D-Calif.), who faces a primary challenge this year. She and other members of the California delegation had pushed for wildfire victims to get the same treatment as hurricane victims. 

Businesses affected by hurricanes Harvey and Irma will also benefit from an employee-retention tax credit.

Another provision extends tax relief for the plug-in electric motorcycles, which will help manufacturers such as Zero Motorcycles, based outside of Santa Cruz, Calif..  

Richard Walker, the CEO of the company, has touted the tax break as helping to create jobs and invest in clean technology.

The deal also extends for one year the alternative motor vehicle credit for qualified fuel cell vehicles, at a cost of $4 million. 

It’s one of many environmentally friendly tax credits, including breaks for biodiesel, energy-efficient home construction and modifications, non-wind renewable power facilities, and second-generation biofuel plants.