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Capitol Hill compromise renews tax breaks for Indian Country

Rep. Ryan Zinke (R-Montana), fourth from left, with leaders of the Crow Tribe. Chairman Darrin Old Coyote is standing next to Zinke. Photo from Facebook

A bipartisan tax compromise unveiled on Capitol Hill on Wednesday morning extends three tax credits for Indian Country.

H.R.2029, the Consolidated Appropriations Act, includes the Protecting Americans from Tax Hikes Act. Three sections of the bill are aimed boosting employment and economic development on and near reservations.

“After years of short-term extensions, good faith bipartisan compromise prevailed," Sen. Orrin Hatch (R-Utah), the chairman of the Senate Finance Committee, said in a press release. "The result? A strong common-sense deal that puts in place permanent and responsible tax relief to help businesses, families and individuals keep more of their hard-earned dollars and promotes greater economic growth here at home."

The package includes an extension of the Indian Coal Production Tax Credit. The Crow Tribe, whose leaders are pursuing a controversial coal export terminal, supports the credit in order to boost coal production on its reservation.

The description of the three Indian Country tax breaks follows:
Section 161. Extension of Indian employment tax credit. The provision extends through 2016 the Indian employment tax credit. The Indian employment credit provides a credit on the first $20,000 of qualified wages paid to each qualified employee who works on an Indian reservation.

Section 167. Extension and modification of accelerated depreciation for business property on an Indian reservation. The provision extends accelerated depreciation for qualified Indian reservation property to property placed in service during 2015 or 2016. The provision also modifies the deduction to permit taxpayers to elect out of the accelerated depreciation rules.

Section 186. Extension and modification of production credit for Indian coal facilities. The provision extends through 2016 the $2 per ton production tax credit for coal produced on land owned by an Indian tribe, if the facility was placed in service before 2009. A coal facility is allowed only nine years of credit. The provision modifies the credit beginning in 2016 by removing the placed-in-service-date limitation, removing the nine-year limitation, and allowing the credit to be claimed against the AMT.

Related Stories:
Appropriations bill includes modest increases for BIA and IHS (12/16)
Senate Committee on Indian Affairs schedules listening session (11/02)
Tribes urge Obama administration to take a stand on taxation (10/21)
Bill seeks to make Indian Coal Production Tax Credit permanent (5/13)

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