On December 20, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. The bill was approved by the House of Representatives on Thursday, December 16, by a vote of 277 to 148, and in the Senate on Wednesday, December 15, by a vote of 81 to 19. This bill extends the 2001 and 2003 income tax cuts for all families for two years.
In a major victory for utility companies, as well as all dividend- paying companies, the 15 percent maximum federal tax rate on dividends and capital gains paid to individual taxpayers was extended until December 31, 2012.
Most energy utilities that deliver natural gas have a history of paying regular dividends, many without interruption for decades or even longer. Thus, this reduced tax rate is a significant benefit to natural gas utility shareholders. The lower tax rate makes energy utilities a more attractive investment. These investments have helped provide utilities with part of the estimated $100 billion they will need during the next 20 years to maintain and expand their pipelines and other infrastructure to meet the growing demand for natural gas.
AGA's members generated thousands of letters and phone calls to Members of Congress to help secure passage of this legislation and we thank our members' employees, executives and retirees for their active participation in this campaign. Senior executives met with Members of Congress in their home states and in Washington, D.C., to help shepherd this critical legislation through Congress.
AGA supports the retention of the 15 percent maximum rate for all taxpayers on a permanent basis. While the two-year extension of the lower tax rate was a victory, it is temporary. This issue will remain on our legislative agenda.