ACCA urges congressional leadership to protect pro-contractor tax policies
ACCA President & CEO Barton James recently sent a letter to Congressional leadership urging them to address looming tax changes that could significantly impact small businesses in the HVACR industry.
What’s at stake for contractors?
In 2017, the Tax Cuts and Jobs Act (TCJA) extended the Section 199A Deduction. 199A allows businesses organized as pass-through entities (or S-corporations) to deduct up to 20% of qualified business income. This deduction helps level the playing field between small businesses and typically larger corporations. Without intervention from Congress, however, this tax relief will expire at the end of 2025, leading to unnecessary financial strain for small businesses. For contractors, the expiration of Section 199A could mean higher taxes, lower profitability, and less capital for investments, hiring, or expanding their operations. This is in addition to economic uncertainty and inflation already placing pressure on small businesses.
ACCA has also urged Congress to maintain energy efficiency tax incentives such as the 179D commercial deduction, 45L credit for developers, and 25C credit for homeowners, which may find their way to the chopping block as Congress considers tax policy. These important provisions incentivize businesses, developers, and homeowners to invest in energy-efficient technologies. By doing so, they drive business for contractors, promote sustainable investments, reduce the overall energy demand, and encourage economic growth.
Main Street Tax Certainty Act
You can do your part to protect Section 199A by participating in ACCA’s Action Alert on The Main Street Tax Certainty Act (S. 1706 and H.R. 4721). Introduced by Senator Daines (R-MT) and Representative Smucker (R-PA), this bill would make Section 199A permanent and provide long-term financial stability and certainty for small businesses.
ACCA will continue to provide updates to its members on any developments related to tax policy affecting contractors.
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