NLBMDA applauds government funding legislation

The National Lumber and Building Material Dealers Association (NLBMDA) said that it supports recent legislation signed by President Trump and passed by Congress.

The legislation will fund the federal government through the remainder of fiscal year 2020. The NLBMDA released the following statement:

“NLBMDA applauds Congress and President Trump for working together to pass legislation that fully funds the federal government through the end of fiscal year 2020," said NLBMDA President and CEO Jonathan Paine. We were especially pleased that the package addressed two critical NLBMDA priorities including the extension of key small business tax incentives and the permanent repeal of the health insurance tax. This legislation represents a major grassroots victory for our members who have worked tirelessly to contact their Members of Congress on these important initiatives.”

Tax Extenders

The appropriations package extends a number of tax incentives, known as “tax extenders," through the end of calendar year 2020. These extenders apply retroactively to 2018 and 2019. Key incentives for the lumber and building material industry include:

  • Section 25C Tax Credit: Provides a credit worth up to $500 for consumers to install qualified energy-efficiency improvements. The lifetime cap on these improvements is $500. Windows are eligible for a tax credit up to $200 with a lifetime cap of $200.

  • Section 45L Tax Credit: Provides a credit for energy-efficient new homes. The credit is equal to $2,000 per home for homes built by contractors and $1,000 per manufactured home. To be eligible, an energy-efficient new home is required to have annual heating and cooling consumption that was at least 50% (30% in the case of manufactured homes) below a comparable unit.

  • Section 179D Energy-Efficient Commercial Buildings Deduction: The 179D provision allows for a tax deduction of $1.80 per square foot to owners of new or existing commercial buildings who install qualified materials that reduce the building’s total energy and power cost by 50% or more, including to the building envelope. These reductions must exceed energy efficiency requirements under ASHRAE 2007.

  • Mortgage Forgiveness: Provides mortgage forgiveness tax relief by eliminating any taxes homeowners might face due to renegotiating the terms of a home loan on a principal residence.

  • Mortgage Insurance Deduction: Allows homeowners to deduct the premiums paid for private and public mortgage insurance, subject to an income cap starting at $100,000.

In October, NLBMDA sent a letter to Congress urging them to extend these incentives.

Health Insurance Tax and Cadillac Tax Repeal

The funding package permanently repeals the health insurance tax (HIT). This is a fee imposed annually on fully-insured health care plans that are offered by many small and medium-sized businesses. The legislation also repealed the so-called “Cadillac Tax” which is a 40% excise levy on high-cost health plans.