House And Senate Work Towards Final Draft Of Corporate Tax Bill

by Mike Godfrey, Tax-News.com, Washington

01 October 2004

Negotiations are underway between the House of Representatives and the Senate to reach agreement on the final version of an international tax bill that aims to put an end to penal EU tariffs on US goods, dubbed by lawmakers as “Euro Taxes”.

The House-Senate committee began its discussions on Wednesday, and legislators have until October 8 to produce a final version of the bill before Congress heads into the electoral recess.

Whilst the main aim of the legislation is to repeal FSC-ETI legislation - the source of the EU’s complaint and consequent tariffs - both the Senate and House versions of the bill are bloated with special interest provisions and tax breaks, all of which will need to be addressed in the days ahead.

Nonetheless, House ways and Means Committee Chairman Bill Thomas, who is chairing the negotiations, is confident that the bill can be passed before the recess. He has produced a 98 page discussion document listing the issues that both chambers agree upon.

Senate Finance Committee Chairman Chuck Grassley, who wrote the Senate version of the bill, was also upbeat.

“Nothing has been easy with this bill, but we are, at last, at the final stage of the process. Now, that we are at conference stage, we cannot fritter away the opportunity to eliminate the Euro Tax,” he told the conferees.

EU tariffs currently stand at 12% on a range of US goods. They will continue rising at 1% per month until hitting a 17% ceiling next March, unless Congress acts in the meantime.

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