Alternative Minimum Tax (AMT)

Support total elimination of the alternative minimum tax (AMT). The AMT was originally designed to ensure that the rich paid taxes. Despite their great wealth, many taxpayers would have negligible tax liability after taking all legal exemptions and deductions. Unfortunately, the AMT was not indexed for inflation, and is now creeping into the middle class and is now beginning to hit smaller businesses

Capital Gains & Dividend Tax

Make bonus depreciation, capital gains tax, and dividend tax reduction permanent. In order to avoid a roll back of the cuts and a default tax increase the cuts must be made permanent because the Tax Relief Act of 2005 only extends for two years, from 2009 through the end of 2010, a maximum tax of 15 percent on capital gains and dividend income.

Income Earned Abroad

Increase the tax exemption amount for U.S. Workers stationed abroad (section 911 of the tax code). In 2006, Congress limited the housing tax exemption for U.S. workers abroad, causing an increase in costs to U.S. firms with employees temporarily working overseas. AGC is working to ensure American companies are more competitive in foreign markets by repealing the 2006 change and increasing the exemption.

Independent Contractor

Clarify the definition of independent contractor and preserve an employer’s right to use these workers. An employer safe harbor should include simplified criteria for classifying workers for purposes of federal employment taxation as “independent contractors” or “employees.”

Lookback Accounting

Eliminate the burdensome lookback accounting requirement for long-term contracts.  AGC supports relief from lookback accounting to simplify tax filings for contractors, while not changing a contractor’s tax liability. Lookback relief would exempt construction contracts under 36 months from the lookback filing requirement and would save contractors time and money for contracts of unusual size and scope, without changing their tax liability. The method essentially requires a construction contractor to file amended tax returns for every prior year in which a currently completed contract was in progress.

Marginal Tax Rates

Repeal the sunset clause on the marginal tax rates reductions for businesses, shareholders, and individuals. In 2001, income tax rates were lowered by 3%, set to expire in 2011. For contractors, high income taxes – whether corporate or individual – reduce a company’s cash flow, thereby reducing the amount of money available to these businesses to expand, buy equipment, hire more workers, bid on future projects, and reduce debt.

Per Diem Allowances

Allow the full deductibility of per diem allowances. Construction workers should be allowed a lodging-only per diem, like the one for federal employees, when they work on jobs away from their homes.

Percentage-of-Completion

Increase for inflation the threshold at which the percentage-of-completion method of accounting is required. The Tax Reform Act of 1986 revised the long-term contract accounting rules for contractors. These rules contained in Section 460 of the Tax Code place unfair burdens on smaller contractors.

Small Business Accounting

Monitor impact of Sarbanes-Oxley and other accounting regulations on privately-held companies. While intended for public companies, provisions often disproportionately affect small businesses, which will be required to follow many of the same rules.

Social Security Reform

Reform our social security system to ensure it is available to all generations of workers. The reform should: protect benefits for seniors and those nearing retirement, establish optional personal retirement accounts for younger workers, and put Social Security on a path to long-term financial stability, all while not increasing taxes on employers or employees.

Taxation of Income While in Dispute

Stop taxation of income while in dispute. Taxpayers should not be required to pay taxes on income that the owner hasn’t paid because it is in contract dispute, until the “all events test” has been performed.

Temporary Work Assignments

Extend the time limit for temporary work assignments. The IRS “temporary work assignment” definition for construction workers should be increased from the present limitation of 12 months to a new limitation of 24 months.