Stimulus includes favorable provisions for propane

February 12, 2009 By    

One day after the Senate passed its version of the economic stimulus package with a 61-37 vote, House and Senate negotiators reached an agreement reconciling the differences between the two bills. The original package has been significantly modified in order to secure the necessary votes. From the propane industry’s standpoint, the bills passed by the House and Senate are virtually the same.

Both bills would increase the percentage and amount of the alternative fuel infrastructure tax credit. The percentage would be increased from 30 percent to 50 percent, and the maximum amounts would increase from $30,000 to $50,000. The credit is still scheduled to expire at the end of 2010.

The non-business energy property tax credit for existing homes would be modified. This is the credit for propane-powered furnaces and water heaters. These appliances would now qualify for a 30 percent tax credit, assuming they meet the required efficiency standards, with a $1,500 lifetime cap for credits taken under this provision in the tax code. This credit would apply to property placed in service after Dec. 31, 2008, and before Jan. 1, 2011.

Finally, the increased expending provisions put into place for 2008 would be extended for another year, through 2009. The amount that could be expensed would be $250,000, with the phase-out limitation for the credit being $800,000.

House and Senate leadership have a self-imposed deadline to have the final agreement to the president before Feb. 16, which is Presidents Day and the beginning of the congressional recess.

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