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11/13/2017

ACEC Ohio expresses concern with U.S. Senate Tax Reform Proposal

Exemption to professional services also an issue in Senate version


In brief, the plan released by the Senate would lower the tax rates for C corporations to 20%, which is similar to the approach in the House tax reform bill and something ACEC supports. For so-called “passthrough businesses” -- S corporations, LLCs and partnerships – the bill creates a new 17.4% tax deduction in an effort to level the playing field with the larger C corporations. This is also a positive step, but unfortunately the Senate bill excludes certain passthrough businesses that provide professional services – doctors, lawyers, and accountants, as well as engineering and architectural firms – from qualifying for the new deduction, with the exception of very small firms, effectively cutting out most of the firms in the state.

Definition of small firm: “The deduction does not apply to specified service businesses, except in the case of a taxpayer whose taxable income does not exceed $150,000 (for married individuals filing jointly; $75,000 for other individuals).”

The following link -- https://www.finance.senate.gov/imo/media/doc/11.9.17%20Chairman's%20Mark.pdf – provides a detailed description of the Senate bill.

ACEC Ohio has sent a letter to Senator Rob Portman, member of the Senate Finance Committee, expressing our concern with the unfairness of this proposal click here for letter.


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