Renewable Energy and Job Creation Tax Act of 2008

Increases and extends through 2016 the tax credit for residential energy efficient property. Eliminates the limitation on the tax credit for solar electric property. Allows a new tax credit for 30% of expenditures for wind turbines used to generate electricity in a residence and for geothermal heat pumps.

Extends tax deferral provisions for the gain on sales of transmission property by vertically-integrated electric utilities to independent transmission companies approved by the Federal Energy Regulatory Commission (FERC).

Allows a 30% investment tax credit rate for advanced coal-based generation technology projects and increases the maximum credit amounts allocable for such projects to $2.55 billion.

Increases to 30% the investment tax credit rate for coal gasification projects.

Extends the excise tax on coal through December 31, 2018. Sets forth special rules for refund claims of coal excise tax by certain coal producers and exporters.

Requires the Secretary of the Treasury to undertake a comprehensive review of Internal Revenue Code provisions that have the largest effects on carbon and other greenhouse gas emissions and provide an estimate of the magnitude of such effects.

Includes cellulosic biofuel within the definition of "biomass ethanol plant property" for purposes of bonus depreciation.

Extends through 2009 income and excise tax credits for biodiesel and renewable diesel used as fuel. Increases the rates of such credits.

Disqualifies foreign-produced fuel that is used or sold for use outside the United States from the income and excise tax credits for alcohol, biodiesel, and alternative fuel production.

Allows a new tax credit for the production of qualified plug-in electric drive motor vehicles.

Allows an exclusion from the heavy truck excise tax for idling reduction devices and advanced insulation used in certain heavy trucks and trailers.

Allows employees to exclude reimbursements for bicycle commuting expenses from gross income.

Increases and extends the tax credit for residential and commercial alternative fuel refueling property expenditures.

Extends the tax credit for nonbusiness energy property expenditures through 2008. Includes energy-efficient biomass fuel stoves as property eligible for such tax credit.

Extends through 2013 the tax deduction for energy efficient commercial building expenditures.

Modifies tax credit amounts for energy efficient household appliances produced after 2007.

Allows an accelerated 10-year recovery period for the depreciation of qualified smart electric meters and smart electric grid systems.

Extends through FY2012 the authority to issue tax-exempt green building and sustainable design project bonds.

Extends through 2009: (1) the tax deduction for state and local sales taxes in lieu of state and local income taxes; (2) the tax deduction for qualified tuition and related expenses; (3) the exemption from withholding of tax of interest-related and short-term capital gain dividends received from a regulated investment company (RIC) and the special rule for RIC stock held in the estate of nonresidents; (4) tax-free distributions from individual retirement plans for charitable purposes; (5) the tax deduction for certain expenses of elementary and secondary school teachers; (6) the inclusion of an RIC within the definition of "qualified investment entity" for income tax purposes; and (7) the additional standard tax deduction for real property taxes.

Extends through 2009: (1) the tax credits for increasing research activities, Indian employment, railroad track maintenance, and the new markets tax credit; (2) accelerated depreciation for qualified leasehold and restaurant improvements, for motorsports racing track facilities, and for business property on Indian reservations; (3) expensing of environmental remediation costs and certain film and television production costs; (4) the tax deduction for income attributable to domestic production activities in Puerto Rico; (5) special rules for related controlled foreign corporations and for the tax treatment of certain payments to tax-exempt organizations by a controlled subsidiary; (6) issuance authority for qualified zone academy bonds; (7) tax incentives for investment in the District of Columbia; (8) the economic development credit for American Samoa; (9) the expanded tax deductions for charitable contributions of food and book inventories by noncorporate taxpayers; (10) the special rule for reductions in the basis of S corporation stock for charitable contributions; (11) work opportunity tax credit eligibility for Hurricane Katrina employees (through August 28, 2009); (12) the subpart F income exemption for active financing income; and (13) the increase in alcohol excise taxes payable to Puerto Rico and the Virgin Islands.

Makes permanent the authority of the Internal Revenue Service (IRS) to: (1) conduct undercover operations; and (2) disclose tax return information related to terrorist activities.

Lowers in 2008 (from $10,000 to $8,500) the earned income threshold amount for determining the refundable portion of the child tax credit.

Modifies certain provisions relating to the tax deduction for domestic film and television productions.

Exempts from the excise tax on bows and arrows certain arrow shafts.

Modifies the standards for imposing penalties on tax return preparers for understatements of tax to require: (1) substantial authority for a position with respect to an item on a tax return if such position was not disclosed with the return; and (2) a reasonable basis for a position that was disclosed with the return. Requires tax return preparers to have a reasonable belief that a position with respect to a tax shelter or a reportable transaction (a transaction having a potential for tax avoidance or evasion) will more likely than not be sustained on its merits.

Provides for revenue enhancements by: (1) reducing by 3% the tax deduction for income attributable to domestic production activities for taxpayers with income derived from activities related to oil, gas, or any primary products thereof; (2) conforming the tax treatment of foreign oil and gas extraction income and foreign oil related income for purposes of the foreign tax credit; (3) including within the reporting requirements of investment brokers the adjusted basis of any publicly traded security owned by customers of such brokers; (4) extending through 2009 the 0.2% Federal Unemployment Tax Act (FUTA) surtax; (5) requiring the inclusion in gross income of employee compensation deferred under compensation plans of certain foreign business entities; (6) delaying until 2017 the application of special rules for the worldwide allocation of interest for purposes of computing the limitation on the foreign tax credit; and (7) increasing the estimated tax payments of certain large corporations in the third quarter of 2013.