Measure fell victim to partisan politics in an election year
This week Senate Majority Leader Chuck Schumer (D-NY) brought the AGC-supported bipartisan tax legislation, H.R. 7024, the Tax Relief for American Families and Workers Act before the full chamber for a vote. The legislation, which is fully “paid for” with offsetting cost reduction elsewhere, overwhelmingly passed the House of Representatives on January 31, 2024, by a vote of 357-70. However, the bill ultimately failed to receive enough votes in the U.S. Senate.
What is in the bill? If passed, the bill would have:
- Rolled back a provision that forces construction firms to amortize their research and development expenses over five years, rather than writing them off in the year they are incurred. This can include costs, including staff salaries, for design/build project activities, developing and improving pre-fabrication methods and other ways to increase efficiency, performance, and reliability, and many other construction-related activities.
- Reinstated full expensing for new and used business equipment by allowing construction firms to fully deduct those expenses in the year the equipment is placed in service.
- Simplified tax preparation by increasing the threshold at which businesses have to issue certain informational tax returns (1099’s) to independent contractors, from $600 to $1000.
So what happened? The legislation sat idle in the Senate for over six months over disagreement on provisions in the bill related to the Child Tax Credit. Republican Senators complained that the sudden move by Leader Schumer, to hold the vote just a few hours before the August recess and ensure virtually no time for debate or amendments, proved that it was a political stunt and ultimately voted no.
Next steps: AGC worked extensively with the tax writing committees in the House and Senate on this legislation, and strongly supported its passage. AGC will continue to monitor the situation, and advocate for continued tax relief for construction firms.
If you have any questions, please contact Matthew Turkstra at (202) 547-4733.