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Senate Unveils Tax Reform Details

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The following is from the American Horse Council:

Senate Unveils Tax Reform Details, Doubles Estate Tax Exemption without Full Repeal

On the heels of the House of Representatives’ release of the Tax Cuts and Jobs Act (H.R. 1) last week, the Senate Finance Committee began to roll out details related to its tax reform bill on Thursday afternoon, not releasing text and an official revenue “score” until Thursday night.  There are some major differences between the two bills that both chambers must reconcile prior to presenting legislation to the president’s desk for his signature.   Notably for the equine and broader agriculture sectors, the senate plan would double the exemption for the estate tax without eliminating it altogether, as provided in H.R. 1. The Senate Finance Committee will begin to mark-up the legislation on Monday, November 13.    Please see the below highlights, outlining some key provisions that will impact the equine industry:

Business Provisions

  • Corporate Tax Rate: The senate bill delays reduction of the corporate tax rate from 35 percent to 20 percent until 2019. By contrast, H.R. 1 provides an immediate corporate tax cut, effective in 2018.
  • Expensing: The senate bill provides “100% bonus depreciation within five years,” which is similar to a provision in H.R. 1.
  • Business Interest: The plan states that small businesses will be able to deduct interest on loans intended to finance the growth of operations and inventory.
  • Alternative Minimum Tax (AMT) – Like H.R. 1, the senate bill eliminates the unpopular AMT, which doubles the amount of time taxpayers must spend to calculate their business or individual tax liability within any given year.
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