The congressional bill concerning the fiscal cliff deal received final approval on Jan. 1, 2013, with a 257 to 157 bipartisan vote in the House of Representatives, the American Nursery and Landscape Association (ANLA) reports. A nine-month extension on the 2008 Farm Bill was also inclouded in the deal. The compromise between Democrats and Republicans includes $46 billion in business tax breaks, and the president is expected to sign the bill soon.
According to MSN.com, part of the bill includes many temporary tax provisions that will continue through the end of the year, including a research and development tax credit. Through an additional provision, businesses may now also receive 50 percent bonus depreciation, which is essentially a tax credit for half the value of new investments.
In the green industry, greenhouses and garden centers benefit from tax breaks for retail store and restaurant improvements and wind power and other alternative energy technologies. Other tax breaks favor railroad track maintenance, auto racetracks, film and television production and rum production in Puerto Rico and the U.S. Virgin Islands.
International companies hoping to bring foreign-earned profits home with little or no taxation did not receive legislature in their favor. If this were addressed in the future, greenhouse operations with offshore locations may receive financial breaks.
ANLA also pointed out some important provisions, including:
- Ending the social security tax holiday
- Increase in the employee’s hospital insurance portion of payroll taxes from 1.45 to 2.35 percent for income over $200,000 for individuals ($250,000 for joint returns; employer rates does not change).
- A new 3.8 percent tax called the Unearned Income Medicare Contribution for investment income (i.e., interest, dividends, royalties, rents) for individuals with an adjusted gross income over $200,000 ($250,000 for joint returns).
- New legislation will maintain the 2012 levels of a write-off maximum of $500,000 if less than $2 million in equipment and machinery are purchased that year.
“This agreement might not be seen as perfect by everyone, but it gives American consumers and businesses the certainty they need to put worries over this issue behind them,” Matthew Shay, head of the National Retail Federation, says in a press release.
The bill does not, however, tackle the issues of the deficit or debt reduction, which lobbyists fear could negatively impact the U.S.’s credit standing and financial power, the LA Times reports. This has also sparked worries that the lack of legislation may result in another fiscal cliff in the first half of 2013.