Status

With many of the beneficial tax policies under the 2017 Tax Cuts and Jobs Act set to expire at the end of 2025, it is imperative that the U.S. House of Representatives and U.S. Senate work to preserve critical tax policies to ensure certainty for thousands of small businesses throughout the construction industry in the United States.

Prior to passage of the ABC-supported TCJA, the construction industry faced the highest effective tax rate of any industry, at 31%. While the TCJA reduced tax rates for construction businesses, the industry continues to pay the highest effective tax rate relative to other industries, and any changes to the tax rates disproportionately affect construction firms.

On Jan. 1, 2024, Rep. Jason Smith, R-Mo., introduced H.R.7024, the Tax Relief for American Families and Workers Act, which would extend the key deduction for research and development and the 100% bonus depreciation provision. The bill passed the House and awaits consideration by the Senate. ABC and a coalition of hundreds of thousands of businesses who collectively employ millions of Americans in all sectors of the U.S. economy have sent letters of support urging the Senate to pass the bill.

On July 18, 2023, Rep. Lloyd Smucker, R-Pa., and Sen. Steve Daines, R-Mont., introduced H.R.4721/S.1706, the ABC-supported Main Street Tax Certainty Act. This legislation would make permanent the 20% deduction for small and individually owned businesses (Section 199A) before they expire at the end of 2025. Section 199A is an essential part of the tax code. Without it, individually and family-owned businesses would pay significantly higher taxes, putting them at a competitive disadvantage and accelerating the economic consolidation taking place in our economy.

Desired Outcome

Maintaining pro-growth tax policies will be essential to ensuring the economy’s growth. ABC will continue to advocate for the beneficial tax proposals included in the TCJA that will spur economic growth and create jobs throughout the country.