News Type: Roundtable Weekly

Bipartisan lawmakers unveil “Invest in America Act

Posted on by Trey Jackson

Legislation would spur American job creation and investment in U.S. communities, infrastructure and Opportunity Zones

 
(WASHINGTON, DC) — The American Institute of Architects (AIA) and The Real Estate Roundtable (RER) are pledging support for the “Invest in America Act” (H.R. 2210), which was unveiled yesterday afternoon by U.S. Reps. John Larson (D-CT) and Kenny Marchant (R-TX).
 
The legislation has the potential to create as many as 284,000 American jobs and attract as much as $125 billion in global investment in U.S. communities, which would support addressing America’s aging buildings and crumbling infrastructure. 
 
The legislation does so by repealing the “Foreign Investment in Real Property Tax Act” (FIRPTA). Originally enacted in 1980, FIRPTA is an arcane tax that deflects global capital from U.S. cities and towns by imposing a capital gains tax on global investors that finance any U.S. real property. Consequently, the law greatly inhibits state and local leaders from partnering with global investors—in addition to leveraging domestic partners—to improve their communities, including renovating aging buildings; constructing roads, bridges, tunnels, hospitals and airports; developing affordable housing; and utilizing new Opportunity Zones.
 
“Under current law, global investment is discouraged in the United States and investors are driven to other countries,” said AIA EVP/Chief Executive Officer Robert Ivy, FAIA. “This legislation will put the U.S. on equal footing in the competition for investment dollars, which can be put directly into American communities through partnerships with local and state governments. This will result in meaningful jobs not only for architects but other professionals in design and construction as well as manufacturing and service industries.”
 
A partial repeal of FIRPTA occurred in 2015 with passage of the “Protecting Americans from Tax Hikes Act.” Changes to the law increased global investment in U.S. cities of all sizes and locations by 33 percent, proving that a full repeal would have a significant benefit to many more state and local economies. 
 
“The FIRPTA regime is an anti-competitive outlier that deflects global capital to other countries,” said RER President and CEO Jeffrey DeBoer. “Our infrastructure challenges demand a holistic approach and innovative solutions. Now is the time to build on the recent success of the 2015 reforms by eliminating FIRPTA outright and unlocking private capital for even more job growth and infrastructure improvements.”
 
Learn more about the legislation by visiting the Invest in America Coalition’s website.
 

Opportunity Zones: Treasury Regs Expected Soon; Reporting Legislation Discussed; White House Hosts Opportunity and Revitalization Council Meeting

Posted on by Trey Jackson

President Trump yesterday hosted the first meeting of the White House Opportunity and Revitalization Council and introduced its new Executive Director – Texas state legislator and former NFL player Scott Turner – to lead a coordinated Administration effort to revitalize economically distressed communities.   (White House tweet, April 4 and Scott Turner intro video)

 

President Trump yesterday hosted the first meeting of the White House Opportunity and Revitalization Council and introduced its new Executive Director – Texas state legislator and former NFL player Scott Turner – to lead a coordinated Administration effort to revitalize economically distressed communities.   (White House tweet, April 4 and Scott Turner intro video)

– enlarge White House photo above –
  • Trump stated during the cabinet-level meeting, “We’re providing massive tax incentives for private investment in these areas to create jobs and opportunities where they are needed the most.  This Council will further leverage federal resources and authorities to support these communities however possible.  We will work to streamline regulations, improve education, promote affordable housing, reduce crime, and expand jobs and skilled training for Americans all throughout our country.  Our actions will directly improve the lives of countless low-income Americans.”  (Remarks by President Trump at the White House Opportunity and Revitalization Council Meeting, April 4)
  • Treasury Assistant Secretary for Tax Policy David Kautter stated at an April 1 conference that the highly-anticipated, second set of Treasury Opportunity Zone (OZ) regulations could be issued in “a couple of weeks.”  Those regulations have been under review since mid-March and according to Kautter, their release will likely include a request for comments concerning the type of information the IRS should consider.  (Tax Notes, April 5)
  • Sen. Tim Scott (R-SC), who led the effort in Congress for enactment of the OZ program, said he is discussing legislation with Sen. Cory Booker (D-NJ) that would reinstate reporting requirements—including investor asset class, zones receiving investment, poverty reduction, and job creation—showing the effects of OZ tax breaks on local communities.  (BloombergTax, March 28 and March 27)
  • The OZ program’s goals and incentives were the focus of a Jan. 29 discussion during The Real Estate Roundtable’s State of the Industry Meeting, which featured Sen. Scott and Roundtable member Geordy Johnson (CEO, Johnson Development Associates, Inc.). (Roundtable Weekly, Feb. 15)
  • Last June, the Treasury Department designated more than 8,700 low-income census tracts in the United States, Puerto Rico, and territories as qualified Opportunity Zones. (IRS Notice 2018-48)  

Congress created the Opportunity Zone tax incentive program in the 2017 Tax Cuts and Jobs Act. Incentives reward Opportunity Fund investors with a capital gains deferral or exclusion on their invested capital in low-income communities.  (Roundtable  Opportunity Zones webpage)

Roundtable Recommends Policies to Spur Infrastructure Investment and Economic Growth

Posted on by Trey Jackson

Repealing FIRPTA, streamlining permit procedures and passing infrastructure financing measures will help spur infrastructure improvements and contribute to economic growth, according to recommendations submitted this week by The Real Estate Roundtable to the House Ways and Means Committee.  (Roundtable Statement for the Record)

Repealing FIRPTA, streamlining permit procedures and passing infrastructure financing measures will help spur infrastructure improvements and contribute to economic growth, according to recommendations submitted this week by The Real Estate Roundtable to the House Ways and Means Committee.  (Roundtable Statement for the Record)

The Roundtable recommendations include the following:  

  • Unlocking private capital by repealing the Foreign Investment in Real Property Tax Act (FIRPTA).  FIRPTA imposes a discriminatory layer of capital gains tax on foreign investment—a tax burden that does not apply to any other asset class.  Repealing FIRPTA would serve as a market-driven catalyst to finance improvements in our nation’s infrastructure.
  • Streamlining the permitting process.  A report by the nonprofit organization Common Good estimates that a six-year delay in starting construction on public projects costs the nation more than $3.7 trillion.  Permit delays dampen private sector investment and add to the overall costs of infrastructure projects. 
  • Increasing the federal gas “user fee” in a responsible and sustainable manner.  The gas user fee (18.4-cents a gallon) that capitalizes the Highway Trust Fund has not been raised since 1993.  The Roundtable supports proposals to sustain the HTF by increasing the user fee by five cents a year for the next five years, and indexing it to inflation thereafter.
  • Revising IRS “volume caps” and other limitations on private-activity bonds (PABs).  Congress should broaden availability of these tax-exempt municipal bonding tools. Bipartisan measures that advance PAB financing, including the Move America Act (H.R. 1508), the Public Buildings Renewal Act ( H.R. 1251), and the BUILD Act  (S. 352), warrant close analysis.   
  • Improving the Transportation Infrastructure Finance Innovation Act (TIFIA) loan program through measures such as the RAPID Act (S. 353).  Congress should consider establishing a similar credit enhancement program to encourage public-private partnerships to help repair an aging pipeline grid and remediate gas leaks that impact climate change. 

DeBoer discussed the role of public-private partnerships to develop infrastructure projects on CNBC’s Squawk Box in June 2017.  “There’s a lot of capital that wants to invest in infrastructure,” DeBoer said.  (Roundtable Weekly, June 9, 2017).  

Ways and Means Chairman Richard Neal (D-MA) has indicated he intends for his committee to consider an infrastructure bill this spring.

House Committee Approves Bill Allowing Banks to Serve Legal Cannabis Businesses; Roundtable Urges Enactment

Posted on by Trey Jackson

The House Financial Services Committee on March 27 approved the Secure and Fair Enforcement (SAFE) Banking Act of 20119 (H.R. 1595), which would allow financial institutions to legally work with state-authorized cannabis-related businesses.

The Roundtable earlier in the week sent a  letter urging swift enactment  of the legislation to the leadership of the House Financial Services and Judiciary Committees.

  • The bipartisan bill, approved by a 45-15 vote, was co-sponsored Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH) and Warren Davidson (R-OH).
  • The Real Estate Roundtable earlier in the week sent a letter urging swift enactment of the legislation to the leadership of the House Financial Services and Judiciary Committees. 
  • Roundtable President and CEO Jeffrey DeBoer notes in the letter, “The SAFE Banking Act provides much-needed clarity for the banking, real estate, and business sectors to function within the contours of state laws that have legalized marijuana.”
  • The Roundtable letter emphasizes that federal and state law differences on cannabis policy leaves banks and real estate providers trapped between their mission to serve lawful businesses in local communities – and the threat of federal enforcement action.  If H.R. 1595 is enacted, federally regulated banks would no longer face the threat of sanction simply by providing financial services to a legitimate cannabis-related businesses (CRB).
  • “Without a bank account, dispensaries and other legal CRBs must operate on a cash basis,” DeBoer notes. “Risks of crime thus increase and tax revenues to pay for infrastructure and other government services are potentially lost.  H.R. 1595 can significantly address these problems by providing protections for banks, real estate firms and their employees from punishment simply because they aim to serve businesses within the 46 states that have legalized marijuana to varying degrees,” DeBoer stated.  (Roundtable SAFE Act letter, March 25)

Rep. Perlmutter noted the broad support for the legislation from the business community, including The Roundtable, in a March 28 news release. Perlmutter added, “With 152 cosponsors at the time of the committee vote – over a third of the entire House – the bill will next move to the floor of the House.  A Senate companion bill is also expected to be introduced in the coming weeks.”  

House Ways & Means Committee Signals Upcoming Tax Legislation; Roundtable Weighs in Regarding Carried Interest, FIRPTA Repeal

Posted on by Trey Jackson

The House Ways and Means Committee this week signaled its upcoming tax policy priorities after holding a hearing on the 2017 Tax Cuts and Jobs Act (“TCJA”) entitled “The 2017 Tax Law and Who It Left Behind.”  The March 27th hearing was the first one focused on the TCJA since Democrats took control of the House, with policymakers examining which provisions they plan to reverse or refine. 

House Ways and Means Committee Chairman Richard Neal (D-MA) signaled the committee’s upcoming tax policy priorities  . 

  • Ways and Means Chairman Richard Neal (D-MA) on Wednesday also announced the committee will hold its first legislative mark-up next week on bills to encourage retirement savings (H.R. 1007) and bipartisan IRS reform. “Our plan here is to move legislation and we’re going to start doing that next week,” Neal said. He indicated that bills addressing other tax issues, including a tax extender package, must first be negotiated with Senate Finance Chairman Charles Grassley (R-IA).  (BGov and CQ, March 27)
  • A future Ways and Means mark-up may also address “technical corrections” to the TCJA.  On March 26, House Ways and Means Committee members Jimmy Panetta (D-CA) and Jackie Walorski (R-IN) introduced the Restoring Investment in Improvements Act. 

The House bill (H.R. 1869) would correct a TCJA mistake that inadvertently lengthened the cost recovery period for qualified improvement property (QIP).  A companion bill in the Senate (S. 803) was introduced earlier this month by Sens. Pat Toomey (R-PA) and Doug Jones (D-AL).  (Roundtable Weekly, March 15).  The Roundtable strongly supports the legislation.

Comment Letters – Carried Interest and FIRPTA Repeal

The Roundtable and 13 other national real estate organizations sent a letter this week to members of the House Ways and Means Committee about the adverse impact that recently introduced carried interest legislation (H.R. 1735) would have on U.S. real estate and entrepreneurial risk taking.

  • The letter notes how the bill would result in a huge tax increase on Americans who use partnerships in businesses of all types and sizes – and would be particularly harmful to the nearly 8 million partners in U.S. real estate partnerships.  

    The Roundtable and 13 other national real estate organizations submitted comments about recently introduced carried interest legislation (H.R. 1735).

     

  • The March 26 letter states, “The false narrative surrounding the carried interest issue is that it targets only a handful of hedge fund billionaires and Wall Street executives.  The carried interest legislation is far broader and would apply to real estate partnerships of all sizes—from two friends owning and leasing a townhome to a large private real estate fund with institutional investors.”
  • Additionally, The Roundtable and 19 national trade organizations – representing every aspect of constructing, developing, financing, owning, and managing real estate and infrastructure in the United States – wrote to Ways and Means Committee Members and other key House lawmakers on March 28, urging them to support the Invest in America Act. 
  • The legislation would repeal the arcane and punitive Foreign Investment in Real Property Tax Act (FIRPTA) of 1980.  FIRPTA imposes a discriminatory layer of capital gains tax on foreign investment—a tax burden that does not apply to any other asset class.  Private investors cite FIRPTA as a principal obstacle to attracting greater foreign capital for infrastructure projects. (Roundtable  FIRPTA Letter, March 28)
  • Reps. John Larson (D-CT) and Kenny Marchant (R-TX) are expected to introduce the bipartisan legislation soon.

Repealing FIRPTA is a key policy action Congress could take to help spur infrastructure improvements and contribute to economic growth, according to recommendations submitted March 20 by The Real Estate Roundtable to the House Ways and Means Committee.  (Roundtable Statement for the Record)

Senate Banking Committee and President Trump Launch Efforts to Address Housing Finance Reform, Including GSEs

Posted on by Trey Jackson

Senate Banking Committee Chairman Mike Crapo (R-ID) and President Trump this week launched separate efforts aimed at reforming the multi-trillion-dollar financial market for single-family and multifamily mortgages, including the Government-Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac.

Senate Banking Committee Chairman Mike Crapo (R-ID) held hearing this week on reforming the multi-trillion-dollar  housing finance markets. 

  • Two days of hearings before the Senate Banking Committee concluded Wednesday, with twelve witnesses testifying about Chairman Crapo’s recent housing reform outline – a proposal that would return the GSEs to private control.  (Roundtable Weekly, Feb. 8)
  • Crapo stated during the hearing, “This outline sets out a blueprint for a permanent, sustainable new housing finance system that: protects taxpayers by reducing the systemic, too-big-to-fail risk posed by the current duopoly of mortgage guarantors; preserves existing infrastructure in the housing finance system that works well, while significantly increasing the role of private risk-bearing capital; establishes several new layers of protection between mortgage credit risk and taxpayers; ensures a level playing field for originators of all sizes and types, while also locking in uniform, responsible underwriting standards; and promotes broad accessibility to mortgage credit, including in under-served markets.” (Senate Banking Committee,  Day One Testimony and Day Two Testimony)

    The Real Estate Roundtable and 27 industry organizations on March 1 submitted principles for reforming the (GSEs).

  • Following the hearings, President Trump released a presidential memodirecting “the Secretary of the Treasury and the Secretary of Housing and Urban Development to craft administrative and legislative options for housing finance reform.”  (Wall Street Journal, March 27)
  • President Trump aims to end the GSEs’ conservatorship, “promote competition in the housing finance market … create a system that encourages sustainable homeownership and protects taxpayers against bailouts.”  The memo also calls for the preservation of the 30-year fixed-rate mortgage. (White House announcement, March 27)
  • The GSE’s received $191 billion in government support during the financial crisis, but since entering conservatorship, they have paid the Treasury $292 billion in dividends,  according to research from Keefe, Bruyette & Woods  (Reuters, March 27)

The Real Estate Roundtable and 27 industry organizations on March 1 submitted principles for reforming the (GSEs).  The coalition’s letter was sent to Acting Federal Housing Finance Agency (FHFA) Director Joseph Otting and Washington policymakers days after the Senate Banking Committee advanced the nomination of Mark Calabria as FHFA Director.  (Roundtable Weekly, March 1)

Calabria is awaiting full Senate confirmation, which is expected soon.

Democrats Reintroduce Legislation to Tax Carried Interest At Ordinary Income Rate

Posted on by Trey Jackson

Legislation to reform the taxation of carried interest was introduced on March 13 by Sen. Tammy Baldwin (D-WI) and House Ways and Means Committee member Bill Pascrell, Jr. (D-NJ).  (News releases: Baldwin and Pascrell)

Legislation to reform the taxation of carried interest was introduced on March 13 by Sen. Tammy Baldwin (D-WI) and House Ways and Means Committee member Bill Pascrell, Jr. (D-NJ). 

  • The Carried Interest Fairness Act of 2019 would reverse decades of partnership tax law by characterizing profits earned through certain investment partnerships as ordinary income.  The legislation would recast capital gains earned by some partners—including gain associated with the sale of appreciated real estate—as income taxable at the maximum individual rate.  The current top capital gains rate is 20 percent and the top tax rate on ordinary income is 37 percent.  
  • Similar legislation was introduced in the 115th Congress.  The 2017 tax overhaul included a change to carried interest taxation, increasing the length of time from one to three years that partners with a carried interest must hold their investment to qualify for long-term capitals gains treatment. (The Hill, March 13)
  • The Democrats’ carried interest bill is under consideration by congressional tax-writing committees as a possible revenue offset for separate legislation to extend temporary tax breaks that lapsed on Jan. 1, 2018.  According to one press report, when asked whether carried interest could be an offset for his tax bill, House Ways and Means Chairman Richard Neal (D-MA) responded, “I think you’re on the right track.”  (CQ password-protected, March 14)

The Real Estate Roundtable opposes proposals such as the Carried Interest Fairness Act.  General partners earning a carried interest in a real estate partnership bear significant risks beyond direct capital contributions.  These risks can include funding predevelopment costs, guaranteeing construction budgets and financing, and exposure to potential litigation over countless possibilities. 

Roundtable’s DeBoer Profiles Industry Policy Agenda, Including TRIA, Infrastructure, FIRPTA

Posted on by Trey Jackson

Roundtable President and CEO Jeffrey DeBoer yesterday discussed the organization’s national policy priorities in the current Congress with Roundtable Board Member Holly Neber (CEO, AEI Consultants and President, CREW Network) during the 2019 Connect Los Angeles conference.  (Watch video of DeBoer’s discussion, March 21)

RER President and CEO Jeffrey DeBoer yesterday discussed the organization’s national policy priorities in the current Congress with Roundtable Board Member Holly Neber during the 2019 Connect Los Angeles conference  . 

The policy discussion, “What’s Next!? What’s Happening in Washington and What Does it Mean for Your Business?” explored topics such as terrorism, infrastructure, foreign investment and tax reform before a standing-room only crowd of more than 500. (Video, LA Connect)

  • DeBoer profiled several compelling policy issues of importance to commercial real estate, including terrorism risk insurance.  DeBoer explained, “… TRIA, the Terrorism Risk Insurance Act, put in place after 9-11 because the direct insurance industry and the resinsurance industry said they couldn’t measure and predict a terrorism attack.  If they can’t measure and predict it, they can’t offer the product.  If they can’t offer the product, businesses can’t get all-risk insurance.  If you can’t get all-risk insurance, you can’t get financing.  So this issue of TRIA being extended … since being in place since 2002, is very important to liquidity. It’s very important to market stability.  And we want to get it extended by the end of this Congress, by the end of 2020.”    
  •  TRIA was enacted in 2002 and was extended in 2005, 2007 and 2015. Without Congressional reauthorization, the program will expire on December 31, 2020.
  • DeBoer also addressed the need for Congress to pass legislation that will address infrastructure improvements on a national level.  “We need to recognize that we are in a new transportation revolution.  And it’s changing and we’re going to change in the next 10, 15 years; the way we access our infrastructure.  We want to get this infrastructure bill done.  We want to get it as broad as possible.  We want to bring in as much private capital as we can,” DeBoer said, emphasizing that public-private partnerships can play a major role in infrastructure improvement projects.  (see Infrastructure story above)
  • He also discussed tax policy priorities, including repeal of the Foreign Investment in Real Property Tax Act (FIRPTA) and recently introduced legislation that would change taxation of carried interest (see Tax Policy story above).

The Roundtable released its 2019 National Policy Agenda during its January State of the Industry Meeting in Washington (Roundtable Weekly, Feb. 1).  

Roundtable Joins Amicus Brief Urging SCOTUS to Address Constitutional Rights in Income-Producing Private Property

Posted on by Trey Jackson

The Roundtable joined the National Association of Home Builders (NAHB) and National Federation of Independent Business (NFIB) today, in an amicus brief requesting the nation’s highest court to accept a case that addresses significant property rights issues.

The Roundtable joined the National Association of Home Builders (NAHB) and National Federation of Independent Business (NFIB) today, in an amicus brief requesting the nation’s highest court to accept a case that addresses significant property rights issues.

  • In Love Terminal Partners, LP v. United States, developers and investors acquired rights to construct and provide flight service from a passenger terminal at Love Field airport near Dallas, Texas.  The venture never proved profitable.  The U.S. Congress subsequently codified a third-party agreement between affected cities, airlines, and the DFW airport regarding interstate air travel to and from the Dallas area.  The Love Terminal investors were not a party to that agreement, which gave the City of Dallas authority to demolish their terminal.  The agreement also provided the terminal could “never” be used for passenger service.
  • The Love Terminal owners thereafter sued the U.S. government for a Fifth Amendment property “taking” by effectuating the agreement in federal law.  At trial, the land owners won a $133.5 million “just compensation” award.  On appeal, however, the Federal Circuit reversed and entirely erased the trial court’s award.  The Love Terminal property owners thus requested the U.S. Supreme Court to hear the case.  The coalition supported that petition today with its amicus brief.
  • Prior Supreme Court precedents determine whether a taking has occurred under these circumstances. Penn Central (1978) considers the economic impact of land-use regulation, and whether the investor has reasonable investment expectations in the property.  Lucas (1992) establishes a “categorical” rule that a taking occurs when government regulations completely “wipe-out” the property’s economic uses.  “[T]his case presents an opportunity … to lay down the law—for the sake of consistency in both Penn Central and Lucas cases—when assessing fair market value for a property that is alleged to have prospective economic value for the buyer,” the brief explains.
  • Notably, the case addresses whether income producing property needs to turn a profit to support a takings claim. In deciding no taking occurred, the intermediate appeals court stressed that revenue never exceeded the owner’s carrying costs.  The amicus brief takes issue with that finding.  It states: “By that standard virtually all start-up companies and development projects would be vulnerable because it often takes years to begin turning a profit on a new venture …. [I]t is improper to ignore the economic realities driving business decisions to invest in a property that will prove profitable in the future.”
  • The brief continues: “Entrepreneurs and business investors typically have a long-term strategy, which assumes a return on investment over an extended period of time. This is especially true for home builders and commercial developers because they bear major upfront financial burdens before they can ever hope to turn a profit …. [I]t is simply wrong to say that negative cash-flow equates to zero value.  Negative cash-flow is commonly an accepted cost of doing business in the beginning of a new venture.”

The Supreme Court will decide whether (or not) it accepts the Love Terminal case likely after its next term starts in October 2019. If it does, briefing on the merits would take place next fall, and a decision would be expected by June 2020.   

Senators Introduce Bipartisan Legislation to Correct Cost Recovery Period for Nonresidential Real Estate Improvements

Posted on by Trey Jackson

This week U.S. Senators Pat Toomey (R-PA) and Doug Jones (D-AL) introduced bipartisan legislation, the Restoring Investment in Improvements Act (S. 803), to correct a mistake in the Tax Cuts and Jobs Act that lengthened the cost recovery period for qualified improvement property (QIP).  

U.S. Senators Pat Toomey (R-PA) and Doug Jones (D-AL) introduced bipartisan legislation, the Restoring Investment in Improvements Act (  S. 803  ), to correct a mistake in the Tax Cuts and Jobs Act that lengthened the cost recovery period for qualified improvement property (QIP).  

  • The unintended drafting error has resulted in a significantly longer 39- or 40-year cost recovery period for most improvements to the interior of nonresidential real estate.  The intent of Congress was to allow the immediate expensing of QIP – or provide a 20-year recovery period in the case of taxpayers electing out of new limitations on the deductibility of business interest.
  • Prior to the law’s enactment, commercial building tenants, retail store owners and restaurant owners could write off the costs of their renovations over a span of 15 years.  The legislation drafted by Sens. Toomey and Jones would allow many businesses to immediately deduct the full cost of interior renovations, and would apply retroactively to January 1, 2018. (The Hill, Mar. 14)
  • The Tax Cuts and Jobs Act included a strict new limitation on the deductibility of business interest expense, but also provided an exception for an “electing real property trade or business.”  In general, taxpayers that develop, rent, manage, or operate real estate are not subject to the interest limits, but are subject to longer cost recovery periods for their real estate and real estate improvements.  The Toomey-Jones bill would ensure that the QIP of an electing real property trade or business is depreciated over 20 years, rather than 40 years.   

  • Roundtable President and CEO Jeffrey D. DeBoer applauded the Senators bipartisan legislation introduced this week. “The Restoring Investment in Improvements Act ( S. 803 ) introduced by Senators Toomey and Jones is a simple and straightforward technical correction to the Tax Cuts and Jobs Act,” he said.

    “The Restoring Investment in Improvements Act (S. 803) introduced by Senators Toomey and Jones is a simple and straightforward technical correction to the Tax Cuts and Jobs Act.  An acknowledged drafting error significantly lengthened the depreciation period for building improvements.  This has caused a large increase in the after-tax costs of modernizing and altering buildings of all types and uses, from shopping centers to office buildings to industrial properties and restaurants.  The result is an immediate and unnecessary drag on building investment, construction activity, and job creation, said Roundtable President and CEO Jeffrey D. DeBoer.  “Congress should act quickly to pass this legislation and reinstate a much shorter cost recovery period for building improvements.”

  • In October 2018, the Roundtable along with 239 businesses and trade groups, wrote to Secretary Mnuchin urging the Treasury Department to provide taxpayers with administrative relief from the drafting error. (Roundtable Weekly, Oct. 12, 2018) 

On Thursday, Treasury Secretary Steven Mnuchin told reporters that he has discussed fixing technical errors in the 2017 tax law with congressional leaders on both sides. “This is something we’re very interested in doing. There’s a lot of demand,” he said following his testimony before the Senate Finance Committee. (Bloomberg, Mar. 14)