On March 27, the Senate voted to add a package of business tax cuts to its version of a supplemental appropriations bill intended to fund U.S. troops in Iraq. The Senate voted to include a minimum-wage increase and small-business tax cut bill that had been passed earlier by the Senate Finance Committee, and that bill contained a provision extending the 15-year depreciation for leasehold improvements (due to expire at the end of 2007) for 3 months, through March 31, 2008. Prior to attaching it to the Iraq war supplemental appropriations bill; however, the Senate amended the language so that the tenant improvement depreciation provision would be extended for a full year, expiring at the end of 2008.
The president has already threatened a veto of the Iraq supplemental appropriations bill because it contains a deadline for withdrawing U.S. troops from Iraq. However, Senator Baucus (D-MT), chairman of the Senate Finance Committee, included the amended Senate language in the supplemental in the belief that it would improve his ability to negotiate with the House of Representatives in conference on the House-passed version. The small-business tax cut package passed by the House was much smaller in cost than the Senate bill, and did not include a number of provisions favored by the Senate, including the extension of 15-year tenant improvement depreciation. House Ways & Means Committee Chairman Rangel (D-NY) has said he wants to keep the cost of any tax close to the House level.
This information was reprinted from the Herndon, VA-based National Association of Industrial & Office Properties’ (NAIOP) newsletter. NAIOP is the nation's leading trade association for developers, owners, investors, asset managers, and other professionals in industrial, office, and mixed-use commercial real estate. To find out more, visit (www.naiop.com).