LIST OF EXPIRING FEDERAL TAX PROVISIONS

2002-2010

Prepared by the Staff

of the

JOINT COMMITTEE ON TAXATION

January 7, 2003

JCX-1-03
i

CONTENTS

Page

INTRODUCTION......................................................................................................................... 1

EXPIRING FEDERAL TAX PROVISIONS, 2002-2010.......................................................... 2

A. Provisions That Expired in 2002......................................................................................... 2

B. Provisions Expiring in 2003................................................................................................ 3

C. Provisions Expiring in 2004................................................................................................ 6

D. Provisions Expiring in 2005................................................................................................ 7

E. Provisions Expiring in 2006................................................................................................ 8

F. Provisions Expiring in 2007.............................................................................................. 10

G. Provisions Expiring in 2008.............................................................................................. 11

H. Provisions Expiring in 2009.............................................................................................. 12

I. Provisions Expiring in 2010.............................................................................................. 13
1

INTRODUCTION

This document,1 prepared by the staff of the Joint Committee on Taxation, provides a 

listing of tax provisions (with references to the applicable section of the Internal Revenue Code 

of 1986 or other applicable law) that expired in 2002 or are currently scheduled to expire in 

2003-2010.

 

1

 This document may be cited as follows: Joint Committee on Taxation, List of Expiring 

Federal Tax Provisions, 2002-2010 (JCX-1-03) January 7, 2003.
2

EXPIRING FEDERAL TAX PROVISIONS, 2002-2010

A. Provisions That Expired in 2002

Provision (Code section)2 Expiration Date

1. Combined employment tax reporting 

demonstration project (sec. 976 of the 

Taxpayer Relief Act of 1997) 8/5/02

2. Special 5-year carryback period for NOLs; 

NOLs may offset 100 percent of alternative 

minimum taxable income (sec. 172(b); sec. 

56(d))

12/31/02

3. Luxury excise tax on passenger highway 

automobiles (sec. 4001) 12/31/02

 

2

 All references are to the Internal Revenue Code of 1986, as amended, unless otherwise 

indicated.
3

B. Provisions Expiring in 2003

Provision (Code section) Expiration Date

1. Disclosure of return information to carry 

out income contingent repayment of 

student loans (sec. 6103(l)(13)(D)) 9/30/03

2. IRS user fees for letter rulings, 

determination letters, advance pricing 

agreements, and similar requests 

(sec. 10511 of the Revenue Act of 1987)39/30/03

3. Personal tax credits allowed against regular 

tax and alternative minimum tax (“AMT”) 

(sec. 26)412/31/03

4. Tax credit for electricity production from 

wind, closed-loop biomass, and poultry 

waste-- facilities placed in service date 

(sec. 45) 12/31/03

5. Work opportunity tax credit (sec. 51) 12/31/03

6. Welfare-to-work tax credit (sec. 51A) 12/31/03

7. Deduction for certain expenses of 

elementary and secondary school teachers 

(sec. 62(a)(2)(D)) 12/31/03

8. Enhanced deduction for corporate 

contributions of computer equipment for 

educational purposes (sec. 170(e)(6)) 12/31/03

 

3

 Public Law 104-117 (an Act to provide that members of the Armed Forces performing 

services for the peacekeeping efforts in Bosnia and Herzegovina, Croatia, and Macedonia shall 

be entitled to tax benefits in the same manner as if such services were performed in a combat 

zone, and for other purposes (March 20, 1996)) extended the statutory authorization for these 

user fees through September 30, 2003.

4

 The Economic Growth and Tax Relief Reconciliation Act of 2001 made this provision 

permanent with respect to the child tax credit and the adoption credit. The provisions of the 

Economic Growth and Tax Relief Reconciliation Act of 2001 sunset after 2010; see Part I., 

below.
4

Provision (Code section) Expiration Date

9. Expensing of “brownfields” environmental 

remediation costs (sec. 198) 12/31/03

10. Archer medical savings accounts 

(“MSAs”) (sec. 220) 12/31/03

11. Interest rate used in determining additional 

required contributions to defined-benefit 

plans for 2002 & 2003 (sec. 

412(l)(7)(C)(i)(III))512/31/03

12. Suspension of 100 percent-of-net-income 

limitation on percentage depletion for oil 

and gas from marginal wells (sec. 613A) 12/31/03

13. Reduction in certain deductions of mutual 

life insurance companies--differential 

earning rates treated as zero (sec. 809(j)) 12/31/03

14. Qualified zone academy bonds 

(sec. 1397E) 12/31/03

15. Tax incentives for investment in the 

District of Columbia:

a. Designation of D.C. enterprise zone; 

employment tax credit; additional 

expensing (sec. 1400)

b. Tax-exempt D.C. empowerment zone

bonds (sec. 1400A)

c. Zero-percent capital gains rate for 

investment in D.C. for property 

acquired by 12/31/03; for gains through 

12/31/08 (sec. 1400B)

d. Tax credit for first-time D.C. 

homebuyers (sec. 1400C)

12/31/03

12/31/03

12/31/03

12/31/03

 

5

 A corresponding provision is contained at sec. 302(d)(7)(C)(i)(III) of the Employee 

Retirement Income Security Act of 1974 (“ERISA”).
5

Provision (Code section) Expiration Date

16. New York Liberty Zone: work opportunity 

tax credit (WOTC) (sec. 1400L(a)) 12/31/03

17. Disclosure of return information to inform 

officials of terrorist activities (sec. 

6103(i)(3)(C))

12/31/03

18. Disclosure upon request of information 

relating to terrorist activities (sec. 

6103(i)(7)) 12/31/03

19. Temporary increase in limit on cover over 

of rum excise tax revenues (from $10.50 to 

$13.25 per proof gallon) to Puerto Rico and 

the Virgin Islands (sec. 7652(f)) 12/31/03

20. Joint Committee on Taxation annual report 

and annual joint hearings on IRS strategic 

plans (secs. 8021(f)(2) and 8022(3)(C)) 12/31/03

21. Tax on failure to comply with mental 

health parity requirements applicable to 

group health plans (sec. 9812)612/31/03

 

6

 Similar provisions are also contained in ERISA and the Public Health Service Act. 

These provisions also expire in 2003.
6

C. Provisions Expiring in 2004

Provision (Code section) Expiration Date

1. Tax credit for research and experimentation 

expenses (sec. 41) 6/30/04

2. Special depreciation allowance for 

qualifying property (sec. 168(k)) Property placed in service on or 

before 12/31/047

3. Indian employment tax credit (sec. 45A) 12/31/04

4. Increased alternative minimum tax 

(“AMT”) exemption amount (sec. 55(d)(1)) 12/31/04

5. Accelerated depreciation for business 

property on an Indian reservation 

(sec. 168(j)) 12/31/04

6. New York Liberty Zone: tax exempt bond 

financing (sec. 1400L(d))

Bonds must be issued before 1/1/05

7. New York Liberty Zone: advance refunding 

of certain tax exempt bonds (sec. 1400L(e))

Refunding must occur before 1/1/05

 

7

 An extension of the placed in service date of one year is provided for certain property 

with a recovery period of ten years or longer and certain transportation property. 
7

D. Provisions Expiring in 2005

Provision (Code section) Expiration Date

1. Leaking underground storage tank trust 

fund excise tax (sec. 4081(d)(3)) 3/31/05

2. Aquatic resources trust fund and land and 

water conservation fund excise tax on 

motorboat gasoline and special fuels (secs. 

4041(a) and 4081(a)(1)) -- all but 4.3 cents 

per gallon89/30/05

3. Highway trust fund excise tax rates:

a. All but 4.3 cents per gallon of the taxes 

on highway gasoline, diesel fuel, 

kerosene, and special motor fuels 

(secs. 4041(a) and 4081(d)(1))9

b. Tax on retail sale of heavy highway 

vehicles (sec. 4051(c))

c. Tax on heavy truck tires (sec. 4071)

d. Annual use tax on heavy highway 

vehicles (sec. 4481)

9/30/05

9/30/05

9/30/05

9/30/05

4. Puerto Rico economic activity tax credit 

(sec. 30A) 12/31/05

5. Deduction for qualified tuition and related 

expenses (sec. 222) 12/31/05

6. Transfer of excess pension assets to retiree 

health accounts (sec. 420) 12/31/05

7. Puerto Rico and possession tax credit 

(sec. 936) 12/31/05

8. Authority for undercover operations 

(sec. 7608(c)) 12/31/05

 

8

 The 4.3-cents-per-gallon rate is permanent.

9

 The 4.3-cents-per-gallon rate is permanent.
8

E. Provisions Expiring in 2006

Provision (Code section) Expiration Date

1. Credit for elective deferrals and individual 

retirement arrangement (“IRA”) 

contributions (sec. 25B) 12/31/06

2. Tax credit for qualified electric vehicles 

(sec. 30) 12/31/0610

3. Deduction for clean-fuel vehicles and 

refueling property (sec. 179A) 12/31/0611

4. Special depreciation rule for certain cleanfuel passenger automobiles 

(sec. 280F(a)(1)(C)) 12/31/06

5. Exceptions under subpart F for active 

financing income (secs. 953 and 954) 12/31/06

6. New York Liberty Zone: special 

depreciation allowance (sec. 1400L(b))

Property placed in service on or 

before 12/31/0612

7. New York Liberty Zone: 5-year recovery 

period for depreciation of certain leasehold 

improvements (sec. 1400L(c)) 

Property placed in service on or 

before 12/31/06

8. New York Liberty Zone: increase in 

expensing under section 179 (sec. 

1400L(f))

Property placed in service on or

before 12/31/06

 

10 The credit phases down for vehicles placed in service after 12/31/03. The credit is 

reduced by 25 percent in 2004, 50 percent in 2005, and 75 percent in 2006. No credit is 

available after 2006.

11 The deduction phases down for clean-fuel vehicles placed in service after 12/31/03. 

The deduction is reduced by 25 percent in 2004, 50 percent in 2005, and 75 percent in 2006. No 

deduction is allowed for clean-fuel vehicles or refueling property after 2006.

12 In the case of nonresidential real property or residential rental property, the property 

must be placed in service on or before 12/31/09.
9

9. New York Liberty Zone: extension of 

replacement period for nonrecognition of 

gain (sec. 1400L(g))

Property placed in service on or

before 12/31/06
10

F. Provisions Expiring in 2007

Provision (Code section) Expiration Date

1. Airport and airway trust fund excise taxes:

a. All but 4.3 cents per gallon of taxes on 

noncommercial aviation jet fuel and

noncommercial aviation gasoline

(secs. 4041(c), 4081(d), and 4091)13

b. Domestic and international air 

passenger ticket taxes (sec. 4261)

c. Air cargo tax (sec. 4271)

9/30/07

9/30/07

9/30/07

2. Reduced excise tax rates for alcohol fuels

and alcohol fuels mixtures (secs. 

4041(b)(2) and (k), 4081(c), and 4091(c)) 9/30/0714

3. Alcohol fuels income tax credits (sec. 40) 12/31/0715

4. New markets tax credit (sec. 45D) 12/31/0716

5. FUTA surtax of 0.2 percent (sec. 3301) 12/31/07

 

13 The 4.3-cents-per-gallon rate is permanent.

14 The reduced rates expire earlier if the tax rate on gasoline and other motor fuels drops 

to 4.3 cents per gallon, which is currently scheduled to occur after September 30, 2005, unless 

the Highway Trust Fund tax rates are extended beyond that date.

15 The income tax credits expire earlier if the tax rate on gasoline and other motor fuels 

drops to 4.3 cents per gallon, which is currently scheduled to occur after September 30, 2005, 

unless the Highway Trust Fund tax rates are extended beyond that date.

16 The new markets tax credit limitation expires on that date.
11

G. Provisions Expiring in 2008

Provision (Code section) Expiration Date

1. Disclosure of tax return information for 

administration of certain veterans programs 

(sec. 6103(l)(7)(D)(viii)) 9/30/08
12

H. Provisions Expiring in 2009

Provision (Code section) Expiration Date

1. Empowerment zone tax incentives:

a. Increased exclusion of gain on sale of 

empowerment zone stock (sec. 1202)

b. Empowerment zone tax-exempt bonds 

and employment credit (secs. 1394 and 

1396)

c. Increased expensing under sec. 179

(sec. 1397A)

d. Nonrecognition of gain on rollover of 

empowerment zone investments

(sec. 1397B)

12/31/09

12/31/09

12/31/09

12/31/09

2. Renewal community tax incentives:

a. Zero-percent capital gains (sec. 1400F)

b. Employment credit (sec. 1400H)

c. Commercial revitalization deduction 

(sec. 1400I)

d. Increased expensing under sec. 179 

(sec. 1400J)

12/31/09

12/31/09

12/31/09

12/31/09
13

I. Provisions Expiring in 2010

Provision (Code section) Expiration Date

1. All provisions of the Economic Growth 

and Tax Relief Reconciliation Act of 

200117

12/31/10

 

17 The sunset applies to all provisions otherwise in effect on the expiration date. Public 

Law 107-358 repealed the sunset contained in the Economic Growth and Tax Relief 

Reconciliation Act of 2001 with respect to the exclusion from Federal income tax for restitution 

received by victims of the Nazi Regime.