Solar Tax Credit Decision Postponed…Again

If you’ve been following the renewable energy tax credit’s epic journey through this nation’s two legislative chambers, you’ll know the industry’s hopes for an extension were dashed for the sixth time on Monday. If you’re just tuning in–bored of the financial mayhem elsewhere, perhaps?–take a look at Adam’s great recap from earlier this week.

The problem remains funding. The bill has received extensive bipartisan support, but there’s a line in the political sand firmly dividing Democrats and Republicans on the money issue. The Democrats want the tax credit extension to be fully paid for by reducing or closing out certain deductions for oil and gas companies. Senate Republicans have been quick to raise the “new tax” flag, but really, there is no new tax. Just fewer old tax breaks. Have a look at the list of funding sources, taken directly from the bill (available in PDF format).

• Sec. 401. Limitation of deduction for income attributable to domestic production of oil, gas, or primary products thereof.
  Sec. 402. Elimination of the different treatment of foreign oil and gas extraction income and foreign oil related income for purposes of the foreign tax credit.
  Sec. 403. Broker reporting of customer’s basis in securities transactions.
  Sec. 404. 0.2 percent FUTA surtax.
  Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax.
  Sec. 406. Nonqualified deferred compensation from certain tax indifferent parties.
  Sec. 407. Delay in application of worldwide allocation of interest.
  Sec. 408. Time for payment of corporate estimated taxes.

So decide how you feel about the funding for the tax credits based on the above. Some might say that with a deficit of over 9 billion dollars, maybe adding the roughly $18 million of the renewable energy tax credit extension is just a drop in the pond. Proponents of fully funding this bill, however, insist that it’s the fiscally responsible thing to do.

In a somewhat surprising move, the Senate has attached the provisions of the renewable energy tax credit bill to the economic bailout bill that being voted on (again) today. It’s difficult to say if this is an inspired idea, or if it’s just condemning the energy bill to the same resolution-less bickering the bailout is receiving. If that fails, HR 7060 won’t be up for another vote until mid-November at the soonest. As a roadblock to the bill’s passage has been President Bush’s threat of a veto if the funding provisions are left in, who knows if the bill will stand a chance (as is) until the new year, though. We’ll certainly keep you updated here at GetSolar.com.