17 December 2010 22:34 [Source: ICIS news]
WASHINGTON (ICIS)--President Barack Obama on Friday signed into law the $858bn (€652bn) tax relief bill that extends for another year federal subsidies and protective tariffs for domestic ?xml:namespace>
The Renewable Fuels Association (RFA), a leading
RFA president Bob Dinneen said that the one-year extension of the subsidy and tariff would “allow for the full maturation of current ethanol technologies while simultaneously accelerating commercialisation of cellulosic and advanced ethanol technologies”.
The tax relief bill singed by Obama chiefly extends for two years lower personal income tax rates that were enacted during the administration of President George W Bush. But those reduced tax rates would have expired on 31 December if Congress and the president had not acted to extend them.
The bill also included billions of dollars worth of tax incentives and write-offs for a variety of businesses.
The ethanol subsidy and tariff, however, are extended for only one year, which means that the new 112th Congress that convenes in January will revisit the subsidy. Many in Congress were already seeking to have the subsidy - which costs taxpayers about $6bn annually - reduced or eliminated.
Under the law and the extension, the federal government pays 45 cents/gal to refineries and fuel blenders to mix corn ethanol into the nation’s gasolines.
The tariff assesses a 54 cents/gal import duty on bio-ethanols made in foreign nations - basically a barrier to sugarcane-based ethanol from
The tax relief measure also was welcomed by general business interests and the
William Carteaux, president of the Society of the Plastics Industry (SPI), said the measure signed on Friday by Obama would spur consumer spending and stimulate innovation and development in the plastics industry.
Among other things, the tax relief bill allows businesses a 100% tax credit for new equipment they buy. It also extends the federal tax credit for research and development (R&D) spending, which had expired at the end of last year.
($1 = €0.76)
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