President Obama pushed for tax reform today, urging Congress to close corporate loopholes that allow firms to legally avoid paying taxes. The president’s plan, however, would not lower the individual tax rate, which a majority of AGC members use to file their taxes as pass-through entities. AGC continues to meet with key congressional decision-makers and staff to advocate for comprehensive changes to the tax code that lowers the rates for all business types, reduces the effective tax rate on construction companies, simplifies the tax code and uses reform as an opportunity to shore up infrastructure trust funds and expand infrastructure incentives.

House Ways and Means Committee Chairman Kevin Brady (R-Texas) addressed AGC’s Highway and Transportation Division during AGC’s 97th Annual Convention in San Antonio, Texas. Chairman Brady’s committee is responsible for tax issues in the House including Highway Trust Fund motor fuel tax revenue. He said he was pleased that Congress was able to find sufficient revenue last year to fund the FAST Act for the next five years but he believes we need to get back to a user fee-based revenue source. He reported that transportation committee chairman Bill Shuster (R-Pa.) is organizing a summit of key House members and outside stakeholders to discuss the best route to a long-term, sustainable solution.

The AGC Financial Issues Committee Summer Meeting is scheduled for June 13-14, 2016 in Washington, DC. Meeting and hotel information is available on the meeting’s site and Early-Bird registration opened this afternoon. CEOs, Owners, CFOs, Tax Directors and other accounting professionals will have an opportunity to hear from influential Members of Congress, FASB representatives, peers on CFO topics and senior CPA consultants regarding current and future tax and accounting issues as well as, AGCs Chief Economist about the outlook for Q4 & 2017 as well government affairs staff readout of the political party candidates and conventions.

On Tuesday, the House Ways and Means Committee convened the panel’s first hearing of the year, which focused on “pro-growth policies” and views expressed by thought leaders in DC-based think tanks. Chairman Kevin Brady (R-Texas) noted his panel will be drafting international tax legislation over the next few months to address corporate inversions. Chairman Brady added that a timeline and details have not yet been decided, and that drafting will begin in the Tax Policy subcommittee led by Rep. Charles Boustany (R-La.).

On Thursday, the House passed the Protecting Americans from Tax Hikes (PATH) Act of 2015 by a 318 to 109 vote, with three republicans voting against the measure and 77 democrats in favor. The PATH Act renews all expired provisions in some form. The bill makes certain tax incentives permanent, while proposing a two-year extension for others, and providing a one-year retrospective for 2015 and one-year prospective for 2016 for the remaining provisions. The Senate will receive the bill and likely vote on Friday, sending the tax package to the president’s desk – which he is expected to sign. To view a copy of the legislative text click here. Specifically the tax extender package includes the following AGC priorities:

On Wednesday, AGC provided commentary to Internal Revenue Service (IRS) and Treasury Department officials during a public hearing on IRS’s Notice of Proposed Rulemaking [REG–136459–09] regarding the Section 199 domestic production activities deduction (DPAD). Specifically, the testimony given by Brian Lenihan, AGC’s Director of Tax and Fiscal Affairs addressed the definition of “substantial renovation” as well as the current administrablity of DPAD and proposed reasonability tests for contractors. The government panel consisted of IRS staff from Office of the Associate Chief Counsel: Paul Handleman, Branch Chief; James Holmes, Attorney with a focus on Pass-throughs and Special Industries; John Aramburu, Senior Counsel for Income Tax and Accounting; and Ken Buck, Tax Policy Advisor at Treasury.

Last week, AGC submitted a comment letter in response the IRS Notice Of Proposed Rulemaking issued in August on proposed amendments to regulations involving the domestic production activities deduction under Section 199 of the Internal Revenue Code. Specifically, the comments addressed the definition of “substantial renovation” in Prop. Treas. Reg. §1.199-3(m)(5), which indicates that activities constitute substantial renovation where they would be a capitalizable improvement under Section 263(a).

Visit AGC’s Action Center to Urge Congress to Support Renewal of AGC-Supported Extenders As of publication time, a deal to extend the 50 plus tax provisions that expired at the end of 2014 remained in flux, with few details available coming from the lead congressional negotiators. AGC has had a multitude of meetings with congressional offices before and after the Thanksgiving Day recess to promote our nine extender priorities. Please visit AGC’s Action Center to send a letter to your members of Congress in support of these nine extender priorities.

Last week, the House Republican Steering Committee met and selected Rep. Kevin Brady (R-Texas) as the next Ways and Means Chairman, replacing the former chairman Rep. Paul Ryan (R-Wis.) who was elevated by his colleagues to become the Speaker of the House. The race to replace Chairman Ryan was the closest watched gavel race in recent memory, pitting two veteran panel members, Reps. Brady and Pat Tiberi (R-Ohio) against each other. AGC sent a letter to Chairman Brady congratulating him on his victory, as well as outlining AGC’s tax, health and pension policy priorities. Rep. Tom Rice (R-SC), a CPA and tax lawyer, was selected to fill the committee vacancy left by the departure of Speaker Ryan.

Register for the AGC Financial Issues Committee (FIC) Winter Meeting held at the Hyatt Regency Resort & Spa at Gainey Ranch in Scottsdale, AZ scheduled for January 13-14, 2016. Please visit the meeting’s site to register as well as view presentations and agendas of past meetings.