U.S. Senator John Thune (R-S.D.), a member of the tax-writing Senate Finance Committee, today commented on the passage of legislation to extend a host of expired tax measures, several of which are important to South Dakota:
“While I’m disappointed the president stymied the bipartisan good-faith negotiations to make a number of important tax provisions permanent, I’m pleased the Senate acted to ensure individuals and businesses can utilize these tax deductions and incentives on their 2014 taxes. From the deduction for state and local sales taxes, to the higher business deduction limits relied upon by small businesses, extending these expired tax provisions is important to South Dakota families and businesses.”
Earlier this month, Congress came very close to a bipartisan deal to make permanent a number of tax relief measures for individuals and businesses that have recently expired. The proposed deal was supported by Senate leadership of both parties as well as House Republicans, but fell apart when the president issued a veto threat in the midst of negotiations, effectively killing the chances this year for permanent tax relief.
Thune believes that South Dakotans deserve permanent tax relief and a predictable and stable tax system, and he intends to keep working toward this goal in the next Congress. He supported the one-year tax extender package as a stopgap measure in order to prevent a tax hike on millions of Americans. The following provisions, which expired at the end of 2013, were extended for one year through December 31, 2014:
- State and Local Sales Tax Deduction: The tax deal extends the local and state sales tax deduction. South Dakota is one of only seven states without an income tax, and South Dakota taxpayers deserve the same treatment as taxpayers in states with an income tax, where the deduction for state income taxes is a permanent part of our tax code.
- Small Business Expensing: The tax deal extends the Section 179 $500,000 small business expensing limit, which is critical for small business owners and family farmers as they plan future investments. If this provision had not been extended, the limit would have dropped to $25,000.
- Charitable Giving: The tax deal extends three charitable tax incentives to encourage private acts of charity and compassion. The measure included provisions to: allow individuals 70 and a half years of age and older to donate up to $100,000 of their individual retirement accounts to charity without incurring a tax penalty; the enhanced deduction for food donations, which encourages businesses to donate food to food pantries and other organizations that serve the hungry; and the tax rules that make it easier for farmers and other landowners to donate land for conservation purposes, helping preserve America's natural habitat.
- ABLE Act: The tax deal included the Achieving a Better Life Experience (ABLE) Act, of which Thune is a cosponsor. The provision will allow individuals with disabilities to create tax-preferred personal savings accounts while ensuring they maintain eligibility for important federal programs that assist with day-to-day needs. Creation of these accounts, which are similar to 529 college savings plans, will help individuals with disabilities attain financial independence and plan for the future