- Category: National
UPDATE: December 18, 2017
On Friday night the House and Senate Conference Committee released their version of the tax reform legislation, after combing through the massive bill this weekend we are encouraged by the changes made as the bill moved through the legislative process. This legislation moved through both chambers at lightning speed, but thanks to the rapid response of AIA’s members across the country we are pleased to say that we made significant progress for architects.
Pass-throughs: The conference agreement that will now almost certainly pass the House and Senate, allows for a 20 percent deduction for businesses organized as “pass-through” entities like S-corps, sole proprietorships and Limited Liability Partnerships, subject to income limitations. Both the House and Senate bills would have greatly restricted this deduction for “service” businesses like doctors, lawyers, architects and engineers. The final conference package now contains specific language stating that architecture and engineering firms are not subject to the limiting provision that applies to other service businesses. This tax relief for architects who organize as pass through companies - which includes the majority of U.S. architecture firms - is a big deal!
Historic Tax Credit: The original House draft abolished the Historic Tax Credit (HTC) altogether. Over the course of the last month, we saw incremental progress due to your outreach and the work of our coalition partners. The Senate bill ultimately kept the HTC though it eliminated the current 10 percent credit for pre-1936 structures and diluted the current 20 percent credit for certified historic structures by spreading it over a five-year period. The conference agreement keeps the HTC and further improves on the Senate bill's language by adding some flexibility for architects wishing to utilize the 20 percent credit.
Energy Efficiency Tax Credit: Although the tax reform bill does not include language to reinstate the 179D Deduction for energy efficiency in commercial buildings, there is a chance that Congress could consider separate legislation to extend 179D and other expired tax provisions. AIA is working with a broad coalition of stakeholders to advocate for this approach, and is supporting efforts to extend expiring tax provisions outside of the tax reform process. More on this in the New Year - stay tuned!
As new AIA President, Carl Elefante, FAIA said in the press release here that, “We owe a deep debt of gratitude to our members for their efforts in reaching out to their elected representatives to make our views known and to make this legislation better for architects and the country. It's clear that the conferees listened to our members, who showed the power of our profession to effect change even when the obstacles to change are huge."
Thank you for speaking up for the profession and for making your voice heard. From everyone at AIA we wish you the happiest of holidays and a prosperous and fruitful new year.
PROTECT ARCHITECTS IN TAX REFORM CONFERENCE!
- In Ohio, from 1976 to 2016, there have been 1,898 completed projects equaling a total investment of $4,091,824,967.
- In Ohio, from 2012 to 2016, total rehabilitation costs equaled $1,392 billion.
- In Ohio, from 2012-2016, historic tax credits created 24,616 jobs.