On Tuesday, the Senate Finance Committee held a hearing on ways Congress could reform the business tax code to make it more globally competitive and to consider the findings of the Committee’s bipartisan business income tax working group. Members also discussed anticipated discussion drafts on corporate integration and cost recovery reform from leaders of the committee. AGC has been actively involved in vetting the discussion drafts with both the committee’s majority and minority staff. AGC will continue to monitor these legislative proposals that have the aim to provide clarity, simplicity and certainty for construction firms.
In convening the hearing, Chairman Orrin Hatch (R‐Utah) noted that the goal of the committee would be to produce business tax reform proposals for debate in the next Congress. Chairman Hatch’s proposal would end the double tax on corporate income, which could have a cascading effect for how pass-through entities organize. Chairman Hatch has said his integration plan may not be publically released until late June.
Meanwhile, Ranking Member Ron Wyden (D-Ore.) released an 88-page proposal aimed at simplifying depreciation schedules known as the “Cost Recovery Reform and Simplification Act of 2016.” Senator Wyden’s proposal is modeled on a similar concept developed by former Committee Chairman Max Baucus (D-Mont.). In summary, it would replace the current depreciation system with a simplified framework of 6 depreciation rates (or “pools”) for most assets other than real property. The discussion draft is a detailed, but not final, document that outlines principles and concepts. Members of AGC’s Financial Issues Committee will review and provide comment to the committee.
For more information, please contact Brian Lenihan at lenihanb@agc.org. or (202) 547-4733.