Today, the House passed the GOP Tax Reform bill 224 to 201, sending the historic legislation to President Trump’s desk for signature. The bill is the most significant overhaul of the tax code since 1986.
After an early morning vote, the Senate passed the bill 51 to 48, sending it back to the house for one last vote. The House had already taken votes earlier Tuesday, but the Senate parliamentarian ruled that three provisions in the bill violated that chamber’s Byrd Rule — guidelines on what types of legislation can pass with a simple 50-vote majority. This violation forced the provisions to be removed and the House to vote once more on a revised version of the bill today.
The House and Senate Tax Reform Conference Committee approved the conference report last Friday, which contained the final version of the tax bill. The bill was the result of behind-closed-doors negotiations to reconcile the differences between both chambers’ version of the tax bill passed last month.
Your Chamber has been monitoring the process closely. Over the past few months, we have been actively engaging our members on how the proposed legislation would affect their business – large and small. Our members raised concerns about provisions that would affect financing for infrastructure and housing development, research and development, as well as education and workforce training. Such concerns were included in the Chambers 2018 Federal Legislation Agenda, adopted December 6.
On November 28, your Chamber’s President and CEO Richard Perez sent a letter to Senator Orrin Hatch, Chair of the Senate Committee on Finance; Senator John Cornyn; Senator Ted Cruz; and our Congressional House delegation urging them to approve comprehensive, pro-growth tax reform legislation that will lead to higher wages and catalyze broad economic growth. Click here for link to letter.
Below is a chart of specific provisions our members raised concerns about and if they were retained or eliminated in the final version of the tax bill:
|Private Activity Bonds (PAB)||Retained||The bill does not eliminate PABs.|
|Advanced Refunding Bonds||Eliminated||The bill eliminates this type of bond.|
|Historic Tax Credit||Retained||The bill does not eliminate the Historic Tax Credit.|
|Low-Income Housing Tax Credit (LIHTC)||Retained||The bill does not eliminate the LIHTC.|
|New Markets Tax Credit||Retained||The bill extends the credit until 2019.|
|Workforce Opportunity Tax Credit||Retained||The bill does not eliminate the credit.|
|Teacher Expenses Reduction||Retained||Teacher expenses remain deductible.|
|Lifetime Learning Credit, Hope Scholarship Credit and the American Opportunity Tax Credit||Retained||The bill does not eliminate these credits.|
|Retaining Section 117(d) and Section 127 tuition waiver and exemptions||Retained||The bill does eliminate tuition.|
|Student Loan Interest Deduction||Retained||Student loan interest remains deductible.|
|State and Local Tax (SALT) deduction||Retained||The bill does not eliminate this deduction.|
|Excise tax on endowments at private universities||Retained||Includes a 1.4% excise tax on endowments at private universities.|
While the final bill did preserve most of the provisions we advocated for, advanced refunding bonds did not make its way into the bill. In addition, we have a new excise tax on endowments at private universities we hoped would not be included in the final legislation.
The final bill lowers the effective corporate tax rate to 21%, preserves the research and development tax credit that encourages businesses and workers to develop “Made in America Products,” and moves toward a territorial tax system – ending a worldwide system that encourages businesses to locate abroad.
We will continue to stay engaged on the issue and share the implications the tax bill will have on the San Antonio business community and community overall. The Chamber encourages the local business community to stay engaged as we gear up for our 2018 SA to DC trip in January 2018.
For more information about the tax reform legislation, click here.