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SENATE PASSES TAX BILL IN WEE HOURS

November 18, 2005

The Senate passed its version of the tax reconciliation bill early this morning. The bill includes an extension of alternative minimum tax relief, but it doesn't extend the the reduced capital gain and dividend rates past 2008. It does include a limit on the benefit of LIFO accounting for big oil companies that has been criticized as a "backdoor windfall profits tax," and which has triggered a rare veto threat from the White House.

The Senate bill will have to be reconciled with a House tax bill. There is a slim chance that the House will vote on its version today, on the heels of passage of a hotly-contested spending bill early this morning, but reports say it is more likely to be passed after the Thanksgiving break. The House bill includes the dividend and capital gain break extension but lacks the AMT relief.

The Republican leadership will work for a conference agreement to include the capital gain extension and AMT relief while dropping the oil company LIFO provision.

UPDATE: The TaxProf has links to statutory language and related information.

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