BOSTON – Senator John Kerry today announced the Senate’s passage of two important legislative achievements: the Tax Extenders and Alternative Minimum Tax Relief Act of 2008, which will provide much-needed tax relief for thousands of Massachusetts families and businesses, and the Energy Improvement and Extension Act of 2009, which provides incentives for investment in clean energy.

Without Congressional action, the individual alternative minimum tax (AMT) would impact an additional 20 million taxpayers in 2008. The AMT was designed to target wealthy individuals exploiting tax loopholes, but has become a massive tax on families based on where they live and the number of children that they have. Currently, the AMT impacts 6 percent of taxpayers in Massachusetts. Without Congressional action, it will affect approximately 27 percent of Massachusetts taxpayers. The Tax Extenders and Alternative Minimum Tax Relief Act of 2008 provides a temporary solution to the AMT by protecting additional taxpayers impacted by the AMT for 2008. This provision protects 700,000 Massachusetts taxpayers.

The Tax Extenders and Alternative Minimum Tax Act of 2008 extends family and business tax cuts, including a two year extension of the research and development tax credit. The Energy Improvements and Extension Act of 2008 provides $17 billion in investment in clean energy incentives and reduces energy tax breaks for big oil companies.

“This legislation will prevent hard working Massachusetts families from being impacted by the alternative minimum tax. For years, I have been fighting to exempt middle class families from this hidden tax. Unfortunately, my efforts have been blocked by Republican colleagues. Today’s action reinforces that Congress needs to work towards a permanent fiscally responsible solution to eliminate the AMT. This legislation will help the struggling economy by preventing tax increases on families, students, and teachers,” said Senator Kerry. “This legislation will encourage research and development in Massachusetts which is essential to economic growth. Tax incentives for clean energy will help break our dependence on foreign oil and create jobs here at home.”

“This legislation provides the right incentives to help the Commonwealth continue to attract green jobs and provide leadership in clean energy technology,” said Governor Deval Patrick.



TAX RELIEF FOR MASSACHSUETTS WORKERS AND BUSINESSES

Child Tax Credit: The bill includes a provision to lower the earnings threshold that families must meet to qualify for the child tax credit. According to the Center on Budget Policies and Priorities, the provision helps 13 million children. In Massachusetts, it helps approximately 143,400 children.

New Markets Tax Credit: Provides $1.3 billion in tax credits for equity investment over the next ten years. Massachusetts is one of the tops ten states that benefit from the credit.

Plug-in Electric Drive Vehicles credit: Provides a tax credit of up to $7,500 to consumers for the purchase of a plug-in electric vehicle.

Clean Renewable Energy Bonds: Provides $800 million of new clean renewable energy bonds and will provide additional funding to help our state finance clean energy projects. For example, last year, the Town of Templeton received funding through this program to support a small wind project at Templeton local high school. The project is slated to come online by the end of 2009.

Renewable electricity: This expands the production tax credit for wind, geothermal, biomass, and other renewable electricity generators. It creates a new tax credit for marine, tidal and other hydrokinetic electricity generators, which will benefit innovative new companies. It also provides an eight-year extension of the 30% investment tax credit for solar energy property and qualified fuel cell property. This provision is critical to the renewable energy industry and clean technology sector in Massachusetts. The sector - including consultants, energy efficiency specialists, and university researchers working on clean energy - now employs some 556 firms and 14,400 people in the Bay State, according to a survey prepared for the Massachusetts Technology Collaborative’s Renewable Energy Trust.

Cellulosic Biofuels: This allows companies to write off 50% of the cost of facilities that produce cellulosic ethanol and other cellulosic biofuels.

Biodiesel: This extends the $1.00 per gallon production tax credit for biodiesel and the 10¢/gallon credit for small biodiesel producers through 2009. The bill ensures that the credit is available for stationary uses like home heating oil boilers. This provision complements the Clean Energy Biofuels Act, which Governor Patrick signed into law in late July.

Tuition Deduction: Extends for two years the $4,000 above the line deduction for tuition. 121,000 families in Massachusetts will benefit from this deduction.

Tuition Expense Deduction: Provides a $250 deduction to teachers who buy supplies for their class room. It will help approximately 95,000 teachers in our state.

Research and Development Tax Credit: In Massachusetts, there are 2,478 companies that could benefit from the credit.

AMT: Extends the “patch” for 2008, and prevents approximately 700,000 taxpayers in Massachusetts who have been impacted by the AMT this year.

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