February 3, 2009
On February 3, 2009, Tax Executives Institute submitted the following comments to the Democratic and Republican leaders of House Committee on Ways and Means and the Senate Committee on Finance concerning pending economic stimulus legislation.
As the preeminent association of in-house tax professionals, Tax Executives Institute endorses enactment of legislation to provide significant tax relief to, and hence effectively stimulate, American businesses. No sector of the economy or of the Nation has been untouched by the current economic downturn. The key in crafting effective stimulus legislation lies in properly balancing tax and non-tax provisions and, with respect to the tax provisions, the provisions affecting individual and business taxpayers.
TEI represents a cross-section of the business community, and our members work daily with the Internal Revenue Code and tax laws around the world. They deal with the tax laws on a day-to-day basis. TEI agrees that the stimulus bill should, at its core, include provisions that will directly and significantly stimulate business activity and hence have a "multiplier effect" beyond that of narrow tax and spending programs. Keeping this in mind, Tax Executives Institute recommends that Congress--
* Lengthen the carryback period for net operating losses to five years without a reduction in the amount of the losses to be carried back.
* Lengthen the carryback period for general business tax credits to five years and temporarily permit 100 percent of a taxpayer's net income tax liability to be offset by the general business credit.
* Extend the provision allowing additional first-year depreciation on qualified investments.
* Extend the period in which taxpayers may claim accumulated alternative minimum tax credits or research tax credits in lieu of the additional depreciation on qualified investments.
* Extend the research tax credit and make it permanent. At a minimum, extend the credit through December 31, 2010.
TEI supports these proposals because they can be enacted expeditiously; can be implemented with a minimum of administrative burden on taxpayers and the government; and, most significantly, will place much needed funds in the hands of distressed businesses at a critical time.
Lengthen the Net Operating Loss Carryback Period to Five Years
TEI supports lengthening the net operating loss carryback period from two years to five years, effective for taxable years ending in 2008 or 2009...