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U.S. House of Representatives Passes Comprehensive Tax Legislation

23
MAY
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Senate to Consider Legislation, Changes are Anticipated

Yesterday morning, the U.S. House of Representatives passed H.R. 1, the “One Big Beautiful Bill Act”, as titled, expansive tax legislation meant to address expiring tax rates, alongside several deductions scheduled to phase out at the end of the year. The legislation passed the House by 215 to 214 vote, and now heads to the Senate for initial consideration across their relevant Committees.

Business-focused highlights of the House approved legislation are below:

  • Expands the current 199A small business deduction (S. Corps, LLCs and similar) to 23 percent from 20 percent and makes the 199A deduction permanent – the current corporate rate, currently at 21%, is already permanent and was not further adjusted in the bill
  • Renews 100 percent immediate expensing for equipment and machinery, 100 percent immediate expensing for research & development in the U.S., and increases deductions for interest expenses
  • Expands the eligible uses of funds within 529 education savings accounts to include post-secondary trades credentials and similar workforce training programs
  • Increases the 1099-MISC filing form threshold to $2,000
  • Makes the 2017 Tax Cuts and Jobs Act (TCJA) individual filing rates permanent
  • Raises the State and Local Tax Deduction (SALT) deduction from $10,000 to $40,000 with phase out over time for higher income earners ($500k or more annually)

Industry-Centered Provisions within H.R. 1Moving Expense Tax DeductionUnfortunately, the currently suspended moving expense tax deduction that was scheduled to resume on January 1st, 2026 was eliminated in the House legislation and is currently not scheduled to go back into effect. The suspension of this benefit, along with dozens of other “pay-fors” in the 2017 Tax Cuts and Jobs Acts, also saw resumption of their benefits paused or eliminated altogether in order to offset the cost of H.R. 1.

IAM, ATA-MSC and Worldwide ERC (WERC) spent considerable time over the last 12 months meeting individually and collectively with House and Senate Tax Committee staff, as well as numerous individual Member offices to explain the benefit of the deduction for the American worker. Prior to its suspension, 72% of filers who claimed the moving deduction earned $100,000 or less annually, making it a solidly middle-class income deduction. IAM and our allied organizations will continue to look for opportunities for its inclusion in the tax bill, as it moves through the Senate process.

Public-Facing Motor Carrier Website, Operating Requirement VerificationRemaining in the legislation from earlier Committee versions is a requirement of the US Department of Transportation (DOT), in coordination with the Federal Motor Carrier Safety Administration (FMCSA), to publish public-facing motor carrier safety data, indicating whether the motor carrier meets or does not meet all Administration operating requirements.

Once established, the public-facing website is directed to state for each motor carrier one of the following statements:

This motor carrier meets Federal Motor Carrier Safety Administration operating requirements and is authorized to operate on the nation’s roadways”

OR

This motor carrier does not meet Federal Motor Carrier Safety Administration operating requirements and is not authorized to operate on the nation’s roadways”

All brokers, freight forwarders and household goods freight forwarders that utilize the website in order to review these credentials are considered to have taken necessary reasonable and prudent determinations. Of note, there is a $100 annual fee for all individuals seeking to access the website.

Increases on Non-Profit Taxes Largely AvoidedFortunately, a new tax structure based on income and designated for not-for-profits (trade associations, for example) to assist in paying for H.R. 1 was not included in the legislation. IAM and other associations coordinated with the American Society of Association Executives (ASAE), as they led the charge on Capitol Hill to push back against earlier proposals that had circulated through financially-focused House Committees. Remaining in the pay-for section for non-profits was a much less significant deduction limitation focused on transportation fringe benefits, for example employee transit and/or parking benefits.

What’s Next for the Tax Bill?While House passage of H.R. 1 is a significant milestone, several steps remain in the process. The Senate will now consider H.R. 1 through their respective Committee procedures and votes, where some changes are expected to be made. After the Senate Committee process is complete, the legislation then goes to the Senate floor, where 50 votes are needed for ultimate passage – as a reconciliation bill, the legislation is not subject to the 60-vote filibuster threshold

After Senate approval, the text of the House and Senate passed bills will need to be merged into one final legislative piece, put together and approved by a handful of House and Senate Members of Congress (known as conferees). The final conference bill will then need to pass the full House and Senate before it may be sent to President Trump for his signature. House leadership’s goal is to have it through these processes and to the President prior to the July 4th Congressional recess. 


U.S. Senate Committee Moves Household Goods Consumer Legislation out of Committee
Earlier this week, the U.S. Senate Commerce Committee voted to approve S. 337, the Household Goods Shipping Consumer Protection Act, making it eligible for consideration on the Senate floor. The legislation is targeted at improved federal enforcement of illegal broker activity. 
The legislation clarifies and expands federal authority regarding civil penalties, principal place of business requirements and “commonalities” across companies seeking to register for operating authority. Similar legislation (H.R. 880) advanced out of the House Transportation & Infrastructure Committee earlier this year. IAM will continue to follow the progress of both bills, and any subsequent regulatory and/or stakeholder input process at the FMCSA should they be signed into law.


U.S. Dept. of Transportation Moves Ahead with English Language Enforcement Policy for CMV Drivers 

As IAM highlighted last month, the White House recently issued an Executive Order (EO), emphasizing the need to enforce current federal law that requires individuals operating a commercial vehicle to “read and speak the English language sufficiently to converse with the general public, to understand highway traffic signs and signals in the English language, to respond to official inquiries, and to make entries on reports and records.” 

Earlier this week, the Dept. of Transportation issued an updated enforcement policy, as instructed by the Executive Order. As outlined in the enforcement policy, beginning June 25th, CMV drivers will need to be able to respond to roadside inspectors’ questions in proficient English, and demonstrate an understanding of highway traffic signs. If an inspector considers either of the two-part assessment failed, the driver will immediately be placed out of service. IAM will continue to follow further information on this forthcoming requirement as it is made available.

If you have questions on the tax bill or other legislative and regulatory issues, please reach out to Bryan Vickers, with IAM’s Legislative and Regulatory team bvickers@pacellp.com, 703-403-2882.

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