On July 31, ABC submitted a letter in support of the cloture motion for the motion to proceed to H.R.7024, the American Families and Workers Act. This legislation, introduced by Rep. Jason Smith, R-Mo., extends vital tax provisions of the Tax Cuts and Jobs Act, including the deduction for research and development and the extension of the 100% bonus depreciation. Notably, this legislation maintains provisions that allow for immediate R&D expensing, which provides for lower tax bills, less paperwork and easier compliance for contractors. In addition, the legislation extends the 100% bonus depreciation that allows construction businesses to expense or write off the purchase of tools, equipment and machinery during the year of purchase.

ABC awaits the Senate's vote on the motion to proceed to H.R.7084. While the Tax Relief for American Families and Workers Act passed the House with bipartisan support on January 31 with a 357-70 vote, Republicans in the Senate have said that they will vote the measure down, which takes 60 voters to pass, as they anticipate having the majority next year and thus hold more negotiating power when it comes to Tax Policy.

On Jan. 19, the House Ways and Means Committee, held a markup of the bipartisan, bicameral tax proposal to extend key tax proposals, negotiated by Senate Finance Chairman Ron Wyden, D-Ore., and House Ways and Means Chairman Jason Smith, R-Mo. The Committee passed the bill by a bipartisan vote of 40-3, with the panel’s top Democrat, Rep. Richie Neal, D-Mass., supporting the bill, indicating that Democratic House leaders will likely follow his lead.

ABC provided a letter of support for the proposal, but also expressed concerns with the bill’s provisions that end the COVID-related Employee Retention Tax Credit on January 31, 2024, and implement new penalties for taxpayers and preparers. While the program has been heavily criticized for its excessive costs and fraudulent claims, ABC urged the committee to ensure those acting in good faith do not face undue penalties. Sen. Wyden and Rep. Smith aim to pass the tax package before Jan. 29 to avoid disruptions to filing season.

Key to ABC members and the construction industry are the bill’s provisions to expand innovation and competitiveness with pro-growth economic policies that include:

• Research & Development (R&D) expensing so businesses of all sizes can immediately deduct the cost of their U.S. R&D investments instead of over 5 years – supporting innovation and growth here at home.
• Interest deductibility to help small- and medium-sized businesses meet payroll and grow – particularly at a time of high interest rates.
• 100% expensing for business investment in U.S. facilities, equipment, and machines
• Increase in the maximum amount a taxpayer may expense from $1 million to $1.29 million for property placed in service starting in 2024

The Committee’s press release can be found here, markup documents here, and a section-by-section here.

On Dec. 5, ABC sent a letter to Speaker Mike Johnson highlighting the critical provisions of the Tax Cuts and Jobs Act set to expire in 2024. ABC specifically called for extending or making permanent the 20 percent qualified business income deduction for pass through businesses, individual rates, and estate tax exemption provisions included in the TCJA. ABC’s letter also backs efforts of U.S. House Ways and Means Committee Chairman Jason Smith, R-Mo., and a call from nearly 150 House Republicans to strike a deal on critical tax extenders for U.S. businesses and employers.

With only two years left until key provisions of the TCJA sunset, ABC is working to preserve these provisions and ensure that lower tax rates and parity for main street businesses with larger corporations allow the economy to thrive, businesses to grow, and provide more Americans with job opportunities. ABC also continues to push for an end of year tax extenders deal, particularly the extension of the R&D tax credit.

On September 13, ABC submitted comments to the House Oversight and Accountability Subcommittee on Health Care and Financial Services hearing titled, “The Inflation Reduction Act: A Year in Review.” ABC’s letter expressed our concerns about anti-competitive and inflationary policy in the IRA that grants developers of clean energy construction projects a bonus tax credit 500% greater than a baseline tax credit of 6% conditioned on satisfying controversial prevailing wage and government-registered apprenticeship requirements.

With the Corporate Transparency Act’s new reporting requirements set to take effect beginning January 1, ABC joined a letter signed by more than 80 trade associations calling on Congress to enact the Protecting Small Business Information Act of 2023 (H.R. 4035). Authored by House Financial Services Committee Chairman Patrick McHenry, the legislation would delay implementation of the CTA until Treasury finishes the necessary rulemaking process, giving affected businesses much-needed relief from the poorly conceived and drafted rules.

The CTA will subject tens of millions of small businesses and other entities to increased paperwork, compliance costs, privacy risks, substantial fines, and even jail.

Congressman Lloyd Smucker, R-Pa., introduced the Main Street Tax Certainty Act, H.R. 4721, legislation which would permanently extend Section 199A of the Internal Revenue Code, which is slated to expire in 2025. Smucker’s bipartisan legislation is cosponsored by 99 Members, including two Democrats, and is supported by all Republican Members of the Ways & Means Committee.

Section 199A, which was adopted as part of the landmark 2017 Tax Cuts and Jobs Act, allows for a 20 percent deduction of qualified income for pass-through businesses. Most small business are structured as a pass-through and this section was included in the Tax Cuts and Jobs Act to promote equity in America’s tax code between small businesses on main street with larger corporations.

ABC joined over 160 organizations in support of the legislation, and also supported mirror legislation in the Senate introduced by Sen. Steve Daines, R-Mont. Earlier this year.

On June 13, ABC sent a letter to the U.S. House Ways and Means Committee for its markup of H.R. 3938, the Build It in America Act. ABC support this legislation, which would extend key provisions of the ABC-supported Tax Cuts and Jobs Act and provide additional certainty to the construction industry, including the deduction for research and development and the extension of the 100% bonus depreciation.

On May 30, ABC announced its support for the Fiscal Responsibility Act, the bipartisan negotiated deal to raise the debt limit, reduce the federal deficit, cut federal spending, and streamline permitting for critical infrastructure projects. In a letter to Congress, ABC highlighted the bill’s significant permitting reforms, including key provisions from the ABC-supported the BUILDER Act (H.R. 1577) that will modernize the National Environmental Policy Act requirements for the first time in decades, and expanding the FAST-41 program to expedite the construction of more energy storage infrastructure projects. Additionally, the bill codifies key elements of the ABC-supported One Federal Decision framework, which will establish lead agency authority, set reasonable time limits for environmental reviews and apply page limits for permitting documents.

On May 18, the Senate Committee on Finance held a hearing on “Tax Incentives in the Inflation Reduction Act.” ABC submitted a statement for the record to the committee highlighting concerns with the burdensome and discriminatory prevailing wage and apprenticeship requirements that will limit opportunities for many construction apprentices in nonregistered programs and place a strain on developers and contractors grappling with a shortage of more than 500,000 workers in the construction industry. You can read the full letter here.

On May 12, the U.S. Department of the Treasury and Internal Revenue Service also released additional guidance on the IRA’s domestic content bonus tax credits. The May 12 guidance states that taxpayers may receive another 10% tax credit increase for meeting domestic content requirements. All steel and iron on a project must be 100% produced in the United States to meet this requirement. Additionally, between 40% to 55%, depending on project type and the year construction begins, of the total cost of other components and subcomponents used on the project must be attributable to components that are mined, produced or manufactured in the United States in order to receive this bonus. The IRS previously requested comments on these requirements, and ABC provided feedback regarding industry concerns about supply chain issues and cost increases that may be caused by these domestic content requirements in comments to Treasury and the IRS.

On May 18, Senator Steve Daines, R-Mont. introduced the Main Street Tax Certainty Act. The bill would prevent rate hikes on America’s individually and family-owned businesses by making permanent the Section 199A 20-percent deduction. This deduction was created by the Tax Cuts and Jobs Act but is scheduled to sunset at the end of 2025.

The introduction of this legislation was widely anticipated in the business community, and ABC joined with more than 140 trade associations representing millions of Main Street businesses in a strong letter of support for the legislation.