The joint House-Senate conference committee announced their final reconciliation of the federal tax reform proposal on Friday. Each chamber is expected to vote on the conference report early this week, where the bill is expected to receive enough support to make it to the President’s desk.
The League has been working with the National League of Cities and our delegation throughout the fall to advocate for changes to a number of provisions within the overall reform proposal that could impact communities in Michigan. While a number of changes that we advocated for have been included in this final version, there are still areas of concern for Michigan municipalities.
After an initial review of the 503-page bill by NLC staff, the conference report on the Tax Cuts and Jobs Act (H.R. 1) does the following;
- Publicly Issued Tax-Exempt Municipal Bonds: Preserved throughout the whole process.
- Private Activity Bonds (PABs): Conference report sided with Senate version and preserved PABs.
- Advance Refunding (ARs) Bonds: Conference report had no difference to reconcile. Tax exemption for interest earned on ARs would terminate on 12/31/2017.
- New Markets Tax Credits (NMTC): Conference report sided with Senate version and preserved NMTC until their authorization normally expires.
- Historic Tax Credits (HTC): Conference report sided with the Senate version and preserves the 20% credit for rehabilitation costs to certified historic structures, but eliminates the 10% credit for pre-1936 structures.
- State and Local Tax (SALT) Deduction: Conference report provided a new modification to SALT. Taxpayers would be able to deduct up to $10k in property taxes combined with either income or sales taxes.
House Actions: The House Rules Committee is expected to consider the bill on Monday (12/18) and possibly vote on it by Tuesday (12/19).
Senate Actions: The Senate aims to hold 10 hours of debate and a vote on Wednesday (12/20).
A continued thanks to all of you who have sent letters, called members of Congress and helped make sure city priorities have not been ignored.
Feel free to reference www.nlc.org/TaxReform for more information, or reach out with any questions or concerns. Stay tuned.
Chris Hackbarth is the League’s director of state & federal affairs. He can be reached at 517-908-0304 and [email protected].