The U.S. Senate today passed the $858 billion legislative tax package by a 81 to 19 vote.  Earlier this week, Senate Majority Leader Harry Reid (D-Nev.) introduced the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, a bill to extend the tax relief provisions enacted by the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (collectively known as the “Bush Tax Cuts”), as well as a number of tax credit programs that were modified by the American Recovery and Reinvestment Act (ARRA). The package includes about $55 billion worth of short-term tax extensions, and represents the Senate’s amendment to the House’s Middle Class Tax Relief Act (H.R. 4853), introduced in March.

Key housing-related aspects of the Senate bill include:

  • Extends for one year the cash grant in lieu of tax credit program, established in Section 1603 of the American Recovery and Reinvestment Act;
  • Extends for two years (through 2011) the New Markets Tax Credit program, permitting $3.5 billion per year in qualified equity investments per year for 2010 and 2011. The bill does not allow certain NMTC investments to offset the Alternative Minimum Tax;
  • Extends the placed-in-service date until January 1, 2012 for properties in the Gulf Opportunity Zone receiving GO Zone low-income housing tax credits;
  • Extends for two years (through 2011) the increased rehabilitation tax credit for qualified expenditures in the Gulf Opportunity Zone, enacted by the GO Zone Act of 2005. The Act increased rehabilitation credits from 10 to 13 percent for qualified properties other than historic structures, and from 20 to 26 percent for any certified historic structures;
  • Extends for one year the use of tax-exempt bonds for rebuilding properties in the GO Zone;
  • Extends for two years (through 2011) the additional depreciation deduction for investments made in the GO Zone;
  • Does not include an extension of the Section 1602 LIHTC cash grant exchange program, additional funding for the Section 48C advanced energy manufacturing tax credit, an extension of the Build America Bonds program, a provision to allow the NMTC to offset the alternative minimum tax (AMT), nor any funding for the National Housing Trust Fund.