Have You Registered for the SIGMA Annual Conference? Rates Go Up Tomorrow!
Have you registered for the SIGMA Annual Conference November 2-4 in Scottsdale, AZ? If not, don’t procrastinate – rates go up tomorrow!
Click Here for More Conference Information and to Register
Questions about SIGMA’s new Fuel Foundation registration rate? Contact Ginny Griffin at email@example.com.
Reconciliation Process Continues in Congress, SIGMA Advocates on Issues of Interest
The reconciliation process by which Democrats hope to advance much of President Biden’s economic agenda continued this week with several key House committees reporting bills that will be combined into the reconciliation package by the House Budget Committee. Speaker of the House Nancy Pelosi (D-CA) has said the House will vote on the package by September 27th, but with pressure from both moderates and progressives to include or exclude many provisions, it is possible that the vote could be delayed.
The House Ways and Means Committee bill includes significant tax changes to offset spending on social safety net provisions. Among the changes are:
- Increasing the top marginal personal income tax rate to 39.6% for individuals making more than $400,000 and joint filers making more than $450,000. A 3% surtax would be imposed on individuals with adjusted gross incomes of more than $5 million.
- Replacing the flat 21% flat corporate income tax rate with graduated rates: 18% on the first $400,000 of income, 21% on income up to $5 million, 26.5% for income above $5 million.
- Increasing the capital gains tax from 20% to 25% for “certain high- income individuals.”
- Reinstating the 16.4 cents per gallon Superfund tax on crude oil and imported petroleum products and double the tax rate on certain chemicals.
- Increase the federal excise tax on tobacco and other nicotine products.
- Provide additional funding for the IRS to increase audits.
- Require investment fund managers to hold assets for more than five years (rather than the current 3 years) in order to get the carried interest tax rate.
- Prohibit taxpayers from claiming losses on digital assets (cryptocurrency)
As the reconciliation process continues, this week SIGMA sent letters to the House and Senate on issues of interest.
On September 12th, SIGMA sent a letter to the House Ways and Means and Senate Finance Committees regarding the biodiesel blenders’ credit. As currently drafted, legislation reported by the House Ways and Means Committee contains a provision that would extend the current $1.00 per gallon biodiesel blenders’ credit and the $.50 per gallon alternative fuel tax credit for an additional 10 years. The legislation also would create a new renewable jet fuel tax credit of $1.50 per gallon. In the letter, SIGMA expressed concern that “creating new tax credits at a higher dollar figure for other alternative fuels that compete for the same feedstock would result in lower carbon reductions at a higher cost to the taxpayer” and urged the committees to extend existing law “at an amount that is at parity with other alternative transportation fuels that compete for the same feedstock.”
On September 14th, SIGMA sent a letter to the House and Senate leadership opposing a provision in the reconciliation package that would significantly increase the federal excise tax on tobacco and other nicotine products. In the letter, SIGMA said tobacco retailers have invested millions to ensure they are in full compliance with local, state, and federal laws, including training employees on age verification requirements, how to safely store products, and investing in signage and advanced technologies. “While proponents of increasing the federal excise tax intend for it to ultimately dissuade users of tobacco products and provide additional revenue, an increase of such substantial proportion will have the opposite effect of what is intended. Instead, it will push many current users to the illicit tobacco market,” SIGMA said.
As previously noted by SIGMA, the budget reconciliation process remains fluid and there will continue to be negotiations over what provisions will make it into the final bill. SIGMA will continue to advocate on behalf of its members and to advise you of developments as they occur.
Sources: BGov, Politico
SIGMA Sends Letter to FDA Requesting Information on PMTA Status List
On September 10th, SIGMA joined a letter to the Food and Drug Administration (FDA) urging its Center for Tobacco Products (CTP) to swiftly publish a public list of electronic nicotine delivery system (ENDS) products for which the Agency has issued marketing denial orders (MDOs). Without this list, our retail members, who make every effort to comply with the law, do not know which products must be removed from shelves,” the letter said.
In August 2020, SIGMA sent a letter asking CTP to publish a list of products for which Premarket Tobacco Applications (PMTAs) had been submitted to know which products could legally be sold in stores during the FDA’s review process. In May, CTP published this list providing needed clarity for retailers, distributors, and wholesalers. “As the Agency takes action on PMTAs, it is imperative that there is continued transparency in the process and that stakeholders across the tobacco trade know all of the products that have had PMTAs rejected as well as all of the products that have had marketing orders granted,” SIGMA stated. Additionally, SIGMA requested that until such information is available, CTP focus its enforcement on manufacturers who know the legal status of their own products and exercise enforcement discretion with respect to retailers selling ENDS products for which the status of their PMTAs has not been made publicly available.
House Oversight Committee Requests Energy Industry Testimony on Climate Disinformation
This week, the House Oversight and Reform Committee sent letters to several oil and gas companies and associations requesting documents and information related to “disinformation campaigns” to impede climate change response efforts. The letters also requested that the CEOs of the companies and associations testify before the Committee at an investigative hearing on October 28th.
“We are deeply concerned that the fossil fuel industry has reaped massive profits for decades while contributing to climate change that is devastating American communities, costing taxpayers billions of dollars, and ravaging the natural world,” the letters said. “We are also concerned that to protect those profits, the industry has reportedly led a coordinated effort to spread disinformation to mislead the public and prevent crucial action to address climate change… [and] that these strategies of obfuscation and distraction continue today. Reporting indicates that, facing weak market performance and investor pressure, some large fossil fuel companies have taken public stances in support of action on global warming while continuing efforts in private to block meaningful solutions and legislation,” the letters continued.
Comparing the hearing to a 1994 hearing where Congress questioned tobacco company executives under oath, Representative Ro Khanna (D-CA), Chairman of the House Oversight and Investigation Subcommittee on the Environment, said subpoenas could be issued if the executives refuse to testify voluntarily. Additionally, the letters requested the companies and associations provide to the Committee by September 30th all internal documents and communications since November 30, 2015 related to climate science and policy, clean energy and the role the company or organization played in "causing, mitigating, or responding to climate change." The Committee also requested any correspondence on those topics related to marketing, lobbying, and advertising, including communications with government officials and the effects climate change or policy would have on profitability.
The letters were reportedly sent to the CEOs of BP, Shell, Chevron, ExxonMobil, the U.S. Chamber of Commerce, and the American Petroleum Institute.
Source: Politico, BGov
Democrats Plan Stopgap Spending Bill, Debt Limit Increase
Congressional Democrats are planning to advance a stopgap spending bill that would fund the federal government through December 3rd. Current funding will expire at on September 30th. The bill also will reportedly include emergency spending to address natural disasters and to process Afghanistan war refugees. It is as yet unclear whether legislation to suspend the federal debt ceiling will be attached to the must-pass bill or if that will be considered separately. Absent such a suspension, the United States could default on its debt as early as mid-October Treasury Secretary Janet Yellen has warned.
Republicans, however, are not inclined to cooperate, with Senate Minority Leader Mitch McConnell (R-KY) noting that Democrats control both Congress and the White House. “They will have to raise the debt ceiling on their own and they have the tools to do it,” Minority Leader McConnell said. Democrats contend that the reason the limit needs to be raised is due to debt incurred by the Trump Administration, including from the 2017 tax cuts, and that Republicans, therefore, have a responsibility to pass an increase. Democrats could attach a suspension of the debt limit to their budget reconciliation package, but they have so far decided not do that.
IRS Extends Dyed Diesel Relief for Certain Counties in Louisiana in Response to Ida and Nicholas
On September 15th, the Internal Revenue Service (IRS), in response to the continued shortages of undyed diesel fuel caused by Hurricanes Ida and Nicholas, announced that it will extend the penalty relief when dyed diesel fuel is sold or used on the highway in certain counties in Louisiana.
On September 1st, the IRS announced that due to the impact of Hurricane Ida it would not impose a penalty when dyed diesel fuel is sold for use or used on the highway for the following parishes in the state of Louisiana: Ascension, Assumption, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Martin, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Washington, West Baton Rouge, and West Feliciana. That relief has been extended and is effective as of August 29, 2021, and will remain in effect through September 30, 2021.
Source: U.S. Internal Revenue Service