There have been some positive developments with respect to the extension of WOTC over the past several weeks.
Both of the tax writing committees have become more focused on the business tax extenders, including WOTC. The Select Revenues Subcommittee of the House Committee on Ways and Means held its second hearing on the extenders at which a panel of academics and a representative of the US General Accountability Office discussed criteria for deciding which of the expired provisions should be renewed. Although WOTC was not discussed specifically, it clearly met the Hearing’s standard of adding to job creation and economic efficiency. Following the hearing Subcommittee Chairman Pat Tiberi (R-OH) stated his hope that an extender bill could be passed by the House before the elections, presumably in September.
Senate Finance Committee Chairman Max Baucus (D-MT) also convened his Members for a private meeting to discuss bringing an extender package together before the elections. Baucus has asked his staff to divide the provisions into three categories, those that should be made permanent and kept even after tax reform, those that should be extended now but phased out in tax reform, and those that should not extended at all.
House Republican Leaders have removed a major impediment to the extenders by indicating that they no longer expect tax reform to be enacted this year. Since the start of this Congress in January of 2011 Republicans have hesitated to consider the extenders until a decision was made on tax reform given that one approach to reform is to exchange many of the tax expenditures for a lower corporate rate. House Leaders have begun to refocus their agenda to the traditional tax issues such the expiring provisions.
While there is every reason to be optimistic about the future of WOTC, this is a highly contentious election year in which many Members of Congress will be apt to defer issues until after the election absent a compelling reason to act sooner.
The way to encourage action sooner is for Clients to contact their Congressman and Senators and to let them know that while they may be willing to wait until after the elections to address the business tax extenders, businesses are suffering from disruptions based on the uncertainty caused by their temporary expiration. Moreover, absent tax reform that is now off the table, any failure to extend WOTC, R&D and other job creating incentives will amount to a tax increase for companies. Legislators should be urged to act before rather than after the election.
For more information on how to contact your Congressmen or Senators and the message that should be delivered, please contact Roy Goldman by email: email@example.com or phone: (732) 657-5030, extension 10.