House Panel Approves GOP Tax Bill

This week, the House Ways and Means Committee approved the Republicans’ tax package in a party-line 26-19 vote. It was a major step in the GOP’s quest to extend the 2017 tax cuts and enact President Donald Trump’s domestic agenda. The vote followed a 17-hour markup session.

During the markup, Representative Don Beyer (D-VA-8) offered an amendment on carried interest to recharacterize the carry/promote as ordinary income. It failed on a party-line vote: 18 ayes to 25 nays. Representatives Steven Horsford (D-NV-4) and Jodey Arrington (R-TX-19) were not present to vote.

House Republicans aim for a floor vote on the full reconciliation bill next week, but must first settle the unresolved issue of the individual SALT cap. Any agreement reached between SALT Republicans and House Speaker Mike Johnson (R-LA-4) would be incorporated into the bill before passage by the House.

Other ICSC priorities have so far been protected, but as the bill moves through the legislative process, they may come under threat again. Below is an update on the key items in the bill. A full summary can be found here.

• Local Property Taxes – Real estate businesses can still fully deduct their state and local taxes, including property taxes.
• Carried Interest – No changes to current treatment.
• Like-Kind Exchanges – No changes to Section 1031.
• 100% Bonus Depreciation, Limitation on Business Interest Deduction, R&D Expense – All are reinstated retroactively to 1/1/25 and extended through 12/31/29.
• 199A Pass-through Deduction – Made permanent and increased from 20% to 23%.
• Estate and Gift Tax Exemption – Permanently increased to $15 million and indexed for inflation.
• Opportunity Zones – Provides a second round of designations and makes other adjustments to the current program. 

For more information contact Phillips Hinch at phinch@icsc.com.