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Tag Archive for House Ways and Means Committee

Innovation Box Tax Reform Proposal

Businessnan carrying heavy tax and revenue burden with clipping path

On July 29. 2015, the House Ways and Means Committee announced that some members had drafted a bill calling for an innovation box (aka patent box), similar to what is used in a few others countries, such as the UK. Chairman Ryan praised the bill as relevant to international tax reform and helping US companies be more competitive.

The proposal has two parts:

1. 71% deduction of the lesser of (a) “innovation box profit for the year” or (b) taxable income (without the deduction).

2. Provision to allow US companies to bring back to the US foreign intellectual property tax free. Read more

A Legislative Update From Capitol Hill

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On Thursday, June 12th the House passed the subsequent bills designed to provide substantial tax benefits to businesses:

• H.R. 4457, passed by a vote of 272 to 144, entitled the “America’s Small Business Tax Relief Act of 2014,” would permanently extend I.R.C. § 179 expensing of up to $500,000 after the bonus depreciation limit expired last year; and
• H.R. 4453, passed by a vote of 263 to 155, entitled the “S Corporation Permanent Tax Relief Act of 2014,” makes permanent the shortening of the built-in gains tax-holding period for S corporations from 10 years to 5 years to give S corporations quicker access to capital. It further contains a basis adjustment fix for charitable contributions made by S corporations. Read more

House Ways And Means Committee Approves Permanent Extension of Research & Experimentation Tax Credit Amongst Other Expired Business Tax Provisions

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On April 29th, The House Ways and Means Committee approved six separate bills to permanently extend certain expired business tax provisions. These bills specifically address the research and experimentation tax credit (H.R. 4438); ‘look-through’ treatment for controlled foreign corporations (CFCs) (H.R. 4464); the subpart F exceptions for active financing income (H.R. 4429); increased section 179 ‘small business’ expensing limits (H.R. 4457); a reduced recognition period for S corporation built-in gains (H.R. 4453); and basis adjustments to stock of S corporations making charitable contributions of property (H.R. 4454).

These permanent ‘tax extender’ bills, approved by the Ways and Means Committee without revenue offsets, are estimated by Joint Committee on Taxation (JCT) staff to reduce federal Read more

Is It Possible? Comprehensive Tax Reform?

TaxConnections Blog PostOctober 24, 2013, the Democrats of the House Ways and Means Committee sent a letter to Chairman Dave Camp calling for a bipartisan effort to move forward on tax reform. They point out the need and the challenge, noting it will likely require $5 trillion of revenue to repeal the AMT and lower the corporate and individual tax rates to 25%.

I think this is a positive move! I also think that Chairman Camp and Senate Finance Chairman Baucus are committed to moving on comprehensive tax reform. I think we will see proposals from one or both committees in the next few months. As to how specific they will be with respect to how the tax base is broadened in order to lower rates in a revenue neutral manner is the big question.

The letter’s key excerpt:

“Comprehensive tax reform must be the product of a bipartisan process. The Tax Reform Working Groups set the Committee off to a good start, and began the process of Republican and Democratic Members on the Committee digging into the substance of current law. The next step is to discuss tax reform legislation together. Read more

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