Chris Coons, a freshman Democratic senator from Delaware, recently introduced legislation that would allow a range of renewable power generation and transmission projects to qualify for a tax structure used by energy companies. So reports Reuters.
Coons thinks this will encourage investment in wind, solar and biofuel projects.
It won’t be considered until after the election, but it will help lawmakers decide whether to extend tax breaks, which are set to expire this year.
Master limited partnerships, or MLPs, allow companies to raise money in the stock market while having income taxed only at the unit holder level, Reuters explains. This allows them to avoid corporate income taxes.
MLPs must generate 90% of their income from natural resources and must return most cash to investors, Reuters says.
Coons has argued his bill cuts out the politics because it applies to all forms of energy — not just renewables.
Coons has support from Republican Senator Jerry Moran of Kansas, who co-sponsored the bil.
Coons estimates the bill could result in billions of dollars in investment for renewable energy MLPs.
In the near term, it is more likely the Obama administration will look at extending the real estate investment trust or REIT, tax structure to renewable energy, Reuters says.. REITs are not required to pay corporate tax but must distribute most of their income to investors.
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