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Policy

Private Company Members Deliver Policy Plans to Lawmakers

By Brian Cove, FEI's Managing Director of Technical Activities

A record number of Financial Executive International members travelled to Washington DC last week for a day-long series of meetings with key members of the House and Senate to discuss public policy issues that affect private companies, pass-through entities and family businesses.

 
The annual Private Company Washington Fly-in, conducted by FEI’s Committee on Private Companies (CPC), enables private company finance executives to meet face-to-face with lawmakers and their staff to provide valuable feedback on how current laws and regulations affect their businesses and to suggest policies to address those concerns.
 
Twenty-one FEI private company members participated in this year’s Fly-in, meeting with 13 members of the House and Senate, staff and Republican and Democrat tax counsel from Congress’ tax-writing House Ways and Means and Senate Finance Committees. In these meetings, FEI members offered policy recommendations, including a call to make permanent the new deduction for qualifying pass-through business income under Section 199A of the Internal Revenue Code.
 
The deduction was created by the 2017 Tax Cuts and Jobs Act (TCJA) but is set to expire after 2025, creating uncertainty about long-term planning for many private companies and pass-through businesses. FEI also called on Congress to help clarify the Section 199A aggregation rules recently finalized by the IRS.
 
Other policy changes recommended by FEI members included:
  • establishment of a federal standard for the taxation of online transactions after the recent Wayfair decision that enabled all 50 states to begin collecting online sales taxes regardless of the location of the seller;
  • equal treatment of business entity state and local taxes (SALT) so that pass-throughs and S-corporations can fully deduct those taxes as a standard business expense as C-corporations are currently allowed to do;
  • correction of a drafting error in the TCJA that erroneously excluded certain Qualified Improvement Property (QIP) from the list of property with a 15-year life;
  • and repeal of a TCJA provision that imposed a tax on not-for-profit organizations that offer employee benefits such as employer-paid parking and mass transit assistance.
 
After a meeting filled day walking the halls of Congress, it was clear to Fly-in participants that given the current political climate on Capitol Hill, there is little appetite among Republican and Democrat Congressional tax-writers to work together in a bipartisan and collaborative manner to address most of the issues raised by FEI members during their discussions.  

Despite the highly polarized environment in Washington, FEI’s Committee on Private Companies will continue to advocate on behalf of private companies on key issues in the coming months.