U.S. Senate Legislation Would Reduce Businesses’ Tax Burdens

U.S. Sen. Steve Daines (R-Mont.) has introduced his Main Street Tax Certainty Act, which would prevent tax rate hikes on U.S. individually and family-owned businesses.

The bill would do so by making permanent the Section 199A 20 percent deduction that provides tax relief to S-corporations, partnerships, sole-proprietorships, and LLCs, but is scheduled to sunset at the end of 2025.

A House companion bill for this legislation has not yet been introduced.

The legislation has 14 Republican cosponsors, indicating Sen. Daines has strong support, but because of opposition from Democrats, the bill is unlikely to be passed into law this Congress.

The U.S. House Committee on Ways and Means is reportedly developing an economic package its lawmakers hope to consider sometime over the summer. That package, which could be a good vehicle for the 199A deduction, is expected to include extend a number of expired tax provisions, including bonus depreciation and deductibility of business interest and research and development expensing.

In related news: Sen. John Barrasso (R-Wyo.) has reintroduced the Book Minimum Tax Repeal Act, which would repeal the corporate alternative minimum tax (CAMT) enacted in 2022. The CAMT imposes a 15 percent minimum tax on the adjusted financial statement income of large corporations with an average annual financial income exceeding $1 billion.

The bill is co-sponsored by nine Republican senators. At a time when businesses of all sizes are confronting rising prices and interest rates and supply chain disruptions, these two piece of legislation are extremely important.

Stay tuned to Connecting the Dots as the debate on them moves forward.