Weyerhaeuser may lose tax credit
U.S. House members are moving to raise more money to pay for in their health-care plan by stopping Weyerhaeuser Co., Temple-Inland Inc. and other makers of pulp and paper from claiming $24 billion in tax credits.
Locally, Weyerhaeuser has operations in Westmont, Naperville and Aurora.
A proposal by Representative Chris Van Hollen, a Maryland Democrat, would keep the companies from using an Internal Revenue Service ruling made public last month to claim a $1.01- a-gallon tax credit for producing cellulosic biofuel from so- called black liquor, a wood byproduct from pulp-making.
That is more than double the 50-cents-a-gallon credit for burning black liquor that Congress authorized to help bolster profit at timber companies. Weyerhaeuser told its shareholders Oct. 30 that the more generous tax credit has "some potential effect" on its future earnings. Austin, Texas-based Temple- Inland Inc. said it is studying whether to claim it.
"The alternative fuel blending tax credit has a direct impact on our cellulose fibers business as does this potential cellulose biofuel tax credit," Weyerhaeuser Chief Executive Dan Fulton told shareholders on a conference call Oct. 30. The company is based in Federal Way, Washington.
Stopping the companies from claiming the more generous credit is estimated to save $24 billion over a decade, Van Hollen of Maryland said in a statement.
Representative Jim McDermott, a Washington Democrat, said House members are discussing the proposal as a way to raise a large amount of money by closing a "loophole." McDermott said he is neutral on the issue because there are no pulp mills in his district and a dwindling number in his state.
Weyerhaeuser spokesman Bruce Amundson declined to comment and referred calls to the American Forest & Paper Association, a trade group. Scott Milburn, a spokesman for the Washington- based trade association, didn't immediately return a call seeking comment. Chris Mathis, a spokesman for Temple-Inland, wasn't immediately available to comment.
International Paper rose 47 cents to $23.04 at 5:30 p.m. in New York Stock Exchange trading. The shares have more than doubled this year. Weyerhaeuser climbed 9 cents to $36.75. Temple-Inland rose 61 cents to $16.12.