Magazine article Strategic Finance

Business Tax Incentives

Magazine article Strategic Finance

Business Tax Incentives

Article excerpt

REGARDLESS OF WHETHER THE Bush individual tax rate cut proposal passes Congress--and that is a big IF--there will be a follow-on bill focusing on business tax cuts. A lot of sectors are lining up, but handicappers would put two in the "high probability" category. The first is the oil and gas industry, an obvious choice given the oil and natural gas price hikes that have hammered the country. Sen. Frank Murkowski (R.-Alaska), chairman of the Senate Energy Committee, introduced the National Energy Security Act of 2001 in late February. It extends the existing Section 29 tax credit for production of nonconventional fuels to projects placed in service between 2001 and 2008. The 65% net income limit for percentage depletion of independently operated oil and gas wells would be repealed. Ditto the 50% net income limit for all owners. Natural gas and petroleum pipelines would be reclassified as seven-year property for purposes of depreciation.

But those incentives may fall short of what the energy industry wants. When he testified before the House Ways & Means Committee on March 5, John Nalbone, president of Universal Resource Holdings, said that a restoration of the tax provisions in effect in the early 1980s is needed. Those provisions were eliminated by the 1986 Tax Reform Act. They included a 10% investment tax credit on recoverable tangible equipment and much more favorable passive loan loss rules. Nalbone did mention extension of the Section 29 fuel tax credit per Murkowski's bill.

Given the freefall of the high-tech industry, it again seems likely that Congress will extend the research and development tax credit.

SEC to Look More Closely at Annual Reports/10-Ks

Now that the flood of IPOs has receded and the SEC corporation finance staff has some time on its hands, it will begin to look more closely at financial reporting in annual reports. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.