U.S. House Passes Tax Reform Legislation

November 17, 2017

Earlier today, the U.S. House of Representatives approved sweeping changes to corporate and individual taxes, the first step in a process that could lead to the most comprehensive reform to the tax code in 30 years.

 While there are elements of the bill that will impact individuals, the primary focus of the legislation is on corporations, with the goal of growing the economy, increasing U.S. jobs and encouraging more firms to stay in the United States.

 Key provisions include the following:

  • A permanent cut in the corporate tax rate from 35 percent to 20 percent.
  • A cut in the rate for some “pass-through” businesses (S corporations, LLCs, partnerships) to 25 percent.
  • The ability for a company to immediately write off of investments in new equipment for five years.
  • A special tax rate of 12 percent on cash held abroad and brought back to the United States.
  • A 20 percent excise tax on payments between American companies and foreign subsidiaries. 

The House bill also preserves an existing program that allows employers to provide a $20-a-month tax-free stipend to employees to help cover expenses of commuting to work on a bicycle. Unfortunately, the Senate version of the tax bill eliminates this benefit. OIA strongly supports keeping this program intact and will work to maintain it in any final tax reform package.

 The Senate Finance Committee is scheduled to consider its version of tax reform today, with a vote on the Senate floor expected to take place after Thanksgiving. Differences between the House and Senate bills would have to be reconciled before final votes take place in both chambers.

 Outdoor Industry Association will continue to monitor progress on this tax reform effort closely.