Dive Brief:

• The tax bill that was advanced Wednesday out of the House Ways and Means Committee contains both controversial breaks for individual taxpayers such as eliminating taxes on overtime pay and tips as well as business-friendly provisions that would extend or revive certain tax cuts from President Donald Trump’s first term. The legislation, part of a package containing Trump’s legislative agenda, was passed by a 26-19 committee vote following a heated overnight meeting, The Hill reported.
• Among the measures in the 389-page bill welcomed by many companies are several tax issues changed by the 2017 Tax Cuts and Jobs Act dubbed the “big three.” The trio of provisions in the bill would extend the 100% corporate bonus depreciation related to capital investments, allow expensing for corporate research and development costs and permit companies to use more favorable calculations of interest expenses deductions, according to Marc Gerson, a partner who specializes in tax policy at the law firm of Miller & Chevalier. 
• Such pro-business elements have helped the bill draw largely strong support from business groups such as the U.S. Chamber of Commerce. “The tax package unveiled by the House marks a crucial step towards ensuring the permanence of President Trump’s pro-growth tax reforms,” Neil Bradley, the chamber’s chief policy officer, said in a statement on Tuesday before the markup. 

Dive Insight:

Since Americans voted to return former president Donald Trump to the White House, business executives have been grappling with how lawmakers and Trump’s second administration would protect trillions of dollars of tax cuts provisions from TCJA that are being phased out or set to sunset at the end of this year. 

As the top tax-writing panel in the House, the Ways and Means Committee is now giving businesses one of the first glimpses of how that will play out. Not all of its elements are favorable for every industry. For instance, the legislation would roll back clean-energy tax breaks such as credits that have helped EV automakers. 

But Gerson said the bill would also maintain three key international tax provisions which had been poised to expire this year: current rates for global intangible low-taxed income (GILTI), foreign-derived intangible income (FDII), and the base erosion and anti-abuse tax (BEAT). 

The legislation is a long way from being passed. The committee’s Wednesday vote is just one step forward in what is likely a lengthy legislative process.

“It’s still got to get through the House floor and then through the Senate,” Gerson said. “So there’s still opportunities and risks as the legislative process is far from over.”