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NECA Legislative Top Three 2/22/19: Tax Talk

Feb 21, 2019

1. Estate Tax Repeal Bill Introduced

Rep. Jason Smith (R-MO) and Rep. Sanford Bishop (D-GA) introduced the Death Tax Repeal Act (H.R. 218), a bill that would repeal the estate tax. Senator John Thune (R-SD) introduced the Senate companion bill.

NECA’s Look Ahead: NECA, as a member of the Family Business Estate Tax Coalition, sent a letter of support for this bipartisan legislation. NECA will continue to advocate for this tax which unfairly targets family businesses and accounts for less than half of one percent of federal revenue.

2. 199A Pass-Through Deduction Rules Finalized

The Treasury Department issued final rules on 199A earlier this month. Section 199A provides both individuals and trusts with a 20 percent deduction for certain income earned directly or through pass-through entities, excluding employee wage income, (Qualified Business Income, or QBI), subject in certain cases, to wage and/or asset basis limitations.

You can read the rules and accompanying guidance here:

NECA’s Look Ahead: Treasury established a workable set of rules based on a very complicated law.  They also embraced some very taxpayer-friendly ideas, like the ability to aggregate multiple businesses together when calculating the deduction in certain circumstances, as well as the option to calculate the deduction at the entity, rather than the taxpayer, level.  These are welcome and will help make the 199A deduction workable for most businesses.

The bottom line, however, is that S corporations and other pass-through businesses now have the rules in place to move forward.  While the rules are not as broad as we had hoped, they are better than many possible alternatives and they now form the foundation from which we intend to build.  Our agenda for 2019 is to continue to make the case for pass-through parity and working to make the 199A deduction broader and more permanent.  Like so many S corporations, these final rules provide us with a starting point.

3. OSHA Issues Delay of Operator Qualifications for Cranes and Derricks Rule

After publishing their final rule on Operator Qualifications for Cranes and Derricks in Construction in November of 2018 and subsequently issuing a delay of the rule until February 7, 2019, OSHA has again decided to delay the full enforcement of the rule. The agency has declared that within the first 60 days of enforcement (until April 15, 2019), OSHA will evaluate good faith efforts taken by employers in their attempt to meet the new documentation requirements for operators of cranes and will offer compliance assistance for those employers acting in good faith.

NECA’s Look Ahead: NECA will continue to monitor the full implementation of this rule and urges any contractors who have issues or concerns with the implementation of the rule to contact the OSHA Directorate of Construction at (202) 693-2020.