The House passed a $5.1 billion tax hike Wednesday, ending a two-week stalemate over a tax cut that was originally intended to raise more than $5 trillion over 10 years.
The House passed the bill by voice vote, clearing the way for a vote by the full House.
The tax bill would raise taxes on luxury hotels, resorts, and other high-priced residential and commercial properties.
The bill would also raise hotel tax rates by 2.5 percent on luxury properties, 2.75 percent on high end hotels, and 3.25 percent on commercial properties and condominiums.
House Speaker Paul Ryan said the House passed it by voice voting, leaving Republicans in control of the House.
Republicans had sought to extend the tax break for six months.
They had threatened to use the short-term extension to force Democrats to approve a tax hike in order to avoid a shutdown.
Democrats had insisted that they would pass a tax increase by the end of March or early April.
Ryan, however, told reporters he could not guarantee the House would approve the bill, even if it passed.
The $539 billion tax cut was designed to help the middle class by creating incentives to move to more affordable housing and to pay down debts.
The proposal included a deduction for hotel stays in Washington, D.C.
The Republican plan also would increase the deduction for charitable contributions to $10,000 for taxpayers earning $500,000 or more and $50,000 and $100,000 earners.
Democrats opposed the plan because it would make it more difficult for many families to pay for college.
Republicans said the deduction would also benefit wealthy taxpayers, who would save more.
But critics said the tax breaks would disproportionately benefit high-income earners and would hurt the middle classes, particularly low-income families.
The Tax Policy Center, a nonpartisan research group, estimated that the $541 billion tax break would generate $1.7 trillion in economic growth in 10 years, while the Senate plan would raise $1 trillion.
The Senate plan was passed with a party-line vote in May and was expected to be approved by the House Wednesday.
The Associated Press contributed to this report.