WASHINGTON – After drawn-out negotiations, congressional leaders unveiled a sweeping omnibus appropriations and tax extenders bill around 2 am on Wednesday that totals more than 2,000 pages. The measure would fund government programs through September 2016, while also extending numerous tax provisions for individuals and businesses.

With respect to taxes, the legislation extends 50-plus provisions that expired at the end of 2014. The legislation generally extends these provisions for two years (retroactively for 2015 and prospectively for 2016); however, some tax provisions were made permanent under the deal while others were extended for five years.

Straight-line cost recovery method
The tax package contains several provisions important to the convenience store industry. The legislation permanently extends the 15-year straight-line cost recovery method for retail outlets that do not sell motor fuels for the following improvements: qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements. This method was already permanent for outlets that sell motor fuels. The legislation would also permanently extend increased expensing limits under Section 179, which allows businesses to expense certain property as a current expense rather than a capital expense.

WOTC and bonus depreciation
The tax bill extends through 2019 two tax provisions utilized by the convenience store industry: the work opportunity tax credit (WOTC) and bonus depreciation. In addition to the five-year extension, the WOTC would also be modified to expand the categories of employees for which the credit applies. Under the revised WOTC, employers could be eligible for tax credits by employing a “qualified long-term unemployment recipient.” Bonus depreciation would be extended through 2019. For property placed in service in 2015, 2016 or 2017, the bonus depreciation percentage is 50%; 40% in 2018; and 30% in 2019.

The majority of the tax bill included two-year extensions (2015 and 2016) of various tax provisions. Importantly, the legislation would extend the biodiesel blenders’ credit for two years.

Earlier this year, the Senate Finance Committee sought to revise the tax credit to a producers’ credit applicable to biodiesel produced in the United States. NACS and others in the retail fuel market successfully fought this attempt and are pleased the final package extends the biodiesel blenders’ credit and does not make it a producers’ credit. Other two-year tax extensions include a credit for alternative fuel vehicle refueling property and a credit for excise taxes applicable to sales of LNG and CNG, among other alternative fuels.

Repeal of the crude oil export ban
In the omnibus government funding bill, Republicans successfully attached a repeal of the crude oil export ban. However, the president would retain some authority to limit crude exports in cases of national emergencies; pursuant to sanctions; or if the export of crude oil causes “sustained material oil supply shortages or sustained oil prices significantly above world market levels that are directly attributable to the export of crude oil produced in the United States” that would likely to lead to job losses.

Menu labeling
The legislation prohibits the Food and Drug Administration (FDA) from doing any work on its menu-labeling regulations until after the end of the fiscal year (September 30, 2016). FDA had already announced that it would not implement its regulations until December 1, 2016.

Environment and labor
While the business community was hoping to roll back some of the Obama administration’s environmental and labor regulations, the omnibus is largely free of such items. The bill does not contain provisions blocking the updated “Waters of the United States” rule or the Labor Department’s forthcoming regulations on overtime requirements—both of which had been considered during the course of discussions on the bill.

Cadillac tax
The legislation does contain a two-year delay in the excise tax on high-cost employer-sponsored health plans, known as the “Cadillac tax.” Under the legislation, the first year the Cadillac tax would be in effect would be 2020, as opposed to 2018.

For truck operators, the bill would also suspend enforcement of the federal 34-hour restart regulations until the Transportation Secretary completes a required study on driver fatigue; the study would need to certify that the new restart requirements result in significant improvements in safety and operator fatigue compared to the previous standard.

The House and Senate are expected to take up the tax and government funding package in the coming days. With current government funding set to expire on Wednesday, the House and Senate passed a short-term funding extension to give each chamber the time necessary to complete work on the larger package.