The One Big Beautiful Bill Act was signed into law by President Donald Trump on July 4, marking a major legislative tax victory for the industry. The bill included several hard-fought, high-impact provisions that benefit ICSC members. These outcomes were achieved through the association’s sustained and strategic multiyear advocacy efforts.
“Many of the provisions passed in 2017 as part of the Tax Cuts and Jobs Act, including the 20% pass-through deduction, Section 199A, were set to expire at the end of 2025, creating a catalyst for Congress to enact tax legislation this year,” said ICSC vice president of tax policy Phillips Hinch. “We knew we had a limited amount of time to educate — or in some cases reeducate — members of the House Ways and Means Committee and the Senate Finance Committee.”
As a result, ICSC made tax issues the focus of a comprehensive two-year plan starting in 2024 and began holding high-level meetings with Democratic and Republican Congressional offices. Efforts also included discussions with Trump administration officials locally and in Washington, D.C., and more than 2,000 emails to Congress regarding the association’s tax priorities. ICSC also coordinated with other national real estate organizations to conduct research, share intelligence and amplify the collective message.
“Our goal was to have substantive conversations with as many key lawmakers as possible and make sure they understood the negative impact tax changes would have on our industry and the communities we serve,” said ICSC executive vice president of public policy Moutray McLaren.
ICSC’s Moutray McLaren, Sen. Tim Scott of South Carolina, Scott’s tax counsel Shay Hawkins, ICSC’s Tom McGee and Edens’ Jodie McLean discuss tax issues in the One Big Beautiful Bill Act during a meeting on June 18.
The ICSC Office of Government Relations & Public Policy also held Mini Fly-Ins in July and October 2024 focused exclusively on tax concerns. Attendees included ICSC president and CEO Tom McGee; ICSC trustee and ICSC PAC committee chair Arturo Sneider of Primestor; ICSC trustees Terrence Maiden of Russell Glen Co., Lyneir Richardson of TREND and Bo Okoroji of Steerpoint Capital; and ICSC members Todd Berlinghof of Hamilton Partners, David Dworkin of LLD Enterprises, Jared Lauderdale of Stirling, Natalie Mason of Capital Square, Alexis Suarez of ASI Real Estate Investments and Doug Wiele of Foothill Partners.
“I am honored to have played a small part in the tremendous effort put forward by ICSC PAC and the ICSC D.C. team in its industrywide efforts to inform and support members of Congress through essential real estate tax treatment issues,” Sneider said. “Through this informative and collaborative work, the industry was able to achieve stellar results in this most recent tax bill.”
Primestor’s Arturo Sneider, ASI Real Estate Investments’ Alexis Suarez, Foothill Partners’ Doug Wiele and ICSC’s Phillips Hinch in the House Ways and Means hearing room during ICSC’s September 2024 Mini Fly-In
The One Big Beautiful Bill Act is a testament to these combined efforts, as the following ICSC priorities were made permanent:
- Section 199A pass-through deduction: The 20% deduction effectively lowers the tax rate on pass-through business income, providing parity with the 21% corporate rate.
- 100% bonus depreciation: This allows owners and tenants immediately to expense the full cost of most improvements to the interiors of buildings.
- business interest deduction: The Section 163(j) limit reverts to the more generous EBITDA threshold in effect in 2021.
- Opportunity Zones: New zones will be designated every 10 years starting in 2027.
- estate tax exemption: The exemption was permanently raised to $15 million, making it easier for family businesses to conduct succession planning.
Also important were the many harmful proposals dropped after extensive engagement from ICSC.
- Business SALT: Initial versions had limited the deductibility of state and local taxes for pass-through businesses.
- 1031 like-kind exchanges: A multiyear education campaign kept this provision safe.
- carried interest/the promote: Despite multiple pushes from Trump, the taxation of the promote was left unchanged.
“The legislation maintains a consistent, fair playing field for commercial real estate entities, and even improves upon certain portions of the 2017 tax bill,” McGee said. “Our members will be able to invest more resources into their local communities because of the framework OBBBA provides.”
For more information contact gpp@icsc.com.
ICSC’s Phillips Hinch, Capital Square’s Natalie Mason, ICSC’s Tom McGee, LLD Enterprises’ David Dworkin and Stirling’s Jared Lauderdale attended a Mini Fly-In devoted to tax issues in July 2024.