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Joel Owens
  • Real Estate Broker
  • Canton, GA
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Current tax reform status 12-2-2017 / Senate Passes Resolution

Joel Owens
  • Real Estate Broker
  • Canton, GA
ModeratorPosted Dec 2 2017, 10:34

Dear ICSC Member,

In the wee hours of this morning the U.S. Senate passed its version of a tax reform bill by a 51-49 margin along party lines. Senator Bob Corker (R-TN) was the only Republican to vote against it due to his concerns about adding to the budget deficit.

The only amendment on carried interest that was voted on was offered by Sen. Tammy Baldwin (D-WI). It was defeated.

Modifications approved overnight that potentially impact real estate include:

  • A deduction up to $10,000 in property taxes paid to state and local governments (SALT). This provision reflects the treatment of property taxes in the House-passed bill.
  • Increasing the deduction for small business owners' qualified business income from 17.4 percent in the underlying bill to 23 percent. However, the deduction won't be widely available to commercial real estate firms or partnerships that rely on "contractors" rather than "employees."
  • Extending 100 percent expensing for qualified business property by four more years, gradually decreasing over time, adding to the five years included in the underlying bill. We believe most ICSC members would opt out of expensing to retain interest deduction.


There are two possible next steps: 1) Members of the House and Senate meet to reconcile their two different approaches. The final product that emerges is then voted upon by both chambers; 2) The House simply yields to the Senate version. This second option presents a quicker resolution, with only the House having to vote. We expect the reconciliation process to begin this coming week.

ICSC wants to thank you for responding to its various alerts to shape the outcome of tax reform. More than 7,000 emails were sent to the House and Senate during the past few weeks. Your emails and calls helped stave off attempts to make the carried interest and active loss limitations provisions more severe. There is nothing like hearing from constituents and your actions had a very beneficial effect!

Sincerely,
Betsy Laird

Senior Vice President, Global Public Policy

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