The Senate last week voted to defeat two energy-related proposals that would have extended the lapsed Existing Home Retrofit Tax Credit, which provides consumers a tax credit of up to $500 for the purchase of qualifying energy-efficient products.
An amendment by Sen. Debbie Stabenow (D-Mich.) would have extended the 25C tax incentives--which expired at the end of last year--through 2012 without providing an offset to pay for the credit. Stabenow’s amendment was defeated on a 49-to-49 vote.
Sen. Pat Roberts (R-Kan.) put forth a broader amendment to extend the 25C tax credit for one year and extend tax credits for the oil and gas industries, but his proposal fell by a 41-to-57 margin. Under Senate rules, both amendments required a 60-vote threshold to achieve passage.
Prior to the votes on the Stabenow and Roberts amendments, the NAHB weighed in forcefully on this matter in written testimony submitted to the Senate leadership.
“This tax credit has helped support the remodeling industry during a period in which new-home sales experienced dramatic declines,” the NAHB said. “To make it an effective incentive for 2012, action needs to be taken in the very near term. Middle-class taxpayers, who are the primary beneficiaries for energy tax incentives, are particularly unlikely to purchase a more expensive, energy-efficient product on the expectation that Congress will extend a tax credit retroactively.”
Remodelers often leverage 25C tax incentives when working with clients. The NAHB estimates that the remodeling activity generated by this tax credit in 2009 was associated with more than 278,000 full-time jobs.
The Stabenow amendment would also have extended another critical energy-efficiency tax credit, the New Energy Efficient Home Tax Credit (45L). This is the only federal incentive available for efficiency in new-home construction.
“Builders who normally utilize the 45L tax credit are faced with the difficult decision of whether to continue to offer the benefit of this credit to their customers without knowing if it will be extended,” the NAHB letter said. “This decision is even more difficult due to the ongoing housing downturn and extremely tight margins that most builders currently operate on.”