Congress passed comprehensive tax reform legislation that will lower rates, spur economic growth and impact your construction business for years to come. However, this process did not start as well as it ended for the construction industry (see chart linked here for details on the final bill).
Initially, the tax reform bill provided little relief for many construction firms organized as pass-throughs, such as S-corps, limited liability corporations and partnerships; eliminated Private Activity Bonds, essential to the financing of transportation infrastructure, low-income housing and other public construction and public-private partnership projects; and repealed the Historic Tax Credit, critical to the private construction market for the rehabilitation and renovation of historic buildings.
Whereas other construction groups endorsed that version of tax reform, AGC did not and continued to fight for a better outcome for our industry. By undertaking a rigorous direct lobbying campaign, connecting construction company CFOs and CPAs with tax writers, and generating thousands of pro-construction messages from members—like you—to key legislators, AGC helped ensure Congress understood the importance of:
- Reducing the corporate rate by 14 points;
- Lowering individual and pass through rates;
- Doubling the estate and gift tax exclusion to $11 million;
- Ensuring the tax-exempt status of Private Activity Bonds remained untouched; and
- Preventing full repeal of the Historic Tax Credit.
That stated, there is still much work to be done in our nation's capital in the New Year. Though Congress missed an opportunity to address the long-term solvency of the Highway Trust Fund, we remain focused on ensuring that this administration keeps its promise to rebuild the nation's infrastructure. And, we are committed to efforts to modernize multiemployer pension plans for the future, among other priorities for this industry.
We look forward to providing educational resources and opportunities soon via webinars and in-person conferences—like the AGC Convention—to help you and your construction business plan for future growth under this new tax law.
Happy Holidays and Happy New Year,
Stephen E. Sandherr