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BPAA Federal Policy Update - September 7

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  • Brady Briefed Republicans on New Tax Cut Push Thursday, Tax Cut 2.0 Legislation Coming Next Week: House Ways and Means Committee Chairman Kevin Brady held a briefing with Republican lawmakers Thursday on the effort to pass another round of tax cuts, House Majority Whip Steve Scalise tells reporters. "In our bill, we will make those tax cuts permanent," Scalise says, referring to reductions made in tax code revamp legislation passed and signed into law late last year. "We’re seeing great economic benefits from what we’ve done,” he says. Brady has said his committee plans on marking up a second phase of tax cuts next week; the measure would make all individual changes in last year’s overhaul permanent, including the $10k limit on state and local tax deductions.
    • The legislation would expand retirement savings options for small businesses and allow start-ups to deduct more costs. The plan would also make individual tax cuts, as well as the $10,000 cap on state and local tax (SALT) deductions, permanent. The decision to hold the vote shows leaders have decided they can sacrifice the support of some Republican lawmakers in New York, New Jersey and other high-tax states -- and don’t mind putting them in the tricky spot of either supporting the cap, or voting against tax cuts backed by their party. Largely because of the SALT cap dilemma, House Republicans were hitting the pause button on “Tax Reform 2.0” legislation, according to three GOP aides who requested anonymity to speak about the matter. The lawmakers had wanted to weigh the political benefits and risks of a vote. On Wednesday, September 5, House Speaker Paul Ryan responded “yes” when reporters asked if the vote was still planned for later this month. Ryan’s comment signals House leaders believe using a second bill to highlight the tax cuts in the two months leading up to the midterms will do more good than harm, even though some Republicans have steered away from campaigning on the law. The tax law’s approval has consistently hovered below 40 percent in recent polls.
    • This legislation comes after Chairman Brady released a 2-page framework on Tax Reform 2.0 in late July.
  • Bloomberg Government Reports: Business Expenses Unaffected by Rules on State, Local Cap: Businesses that make business-related contributions to charities in return for state or local tax credits can generally deduct those payments as business expenses, the IRS said. The Internal Revenue Service proposed regulations (REG-112176-18) Aug. 23 that would establish new limits on the federal deduction allowed for charitable donations made to receive state tax credits. However, the proposal doesn’t affect the business expense deduction, the agency said in a Sept. 5 news release (IR-2018-178). Businesses generally can still deduct business-related payments in full as long as the payment qualifies as an ordinary and necessary business expense, the IRS said in response to taxpayer inquiries. “The IRS clarification makes clear that the longstanding rule allowing businesses to deduct payments to charities as business expenses remains unchanged under the Tax Cuts and Jobs Act,” Treasury Secretary Steven Mnuchin said in a Sept. 5 news release. The proposed regulations would allow a federal charitable deduction only to the extent a contribution to a charity exceeds the amount of state tax credit generated by the contribution. The proposed rules seek to stifle attempts by states to circumvent the 2017 tax law’s (Pub. L. No. 115-97) $10,000 limit on state and local tax deductions.
  • Tax 2.0 Bill Could Include Workforce Training Credit Provision: Rep. Lloyd Smucker is in discussions with House leaders to include his workforce development tax credit legislation as part of the Tax Reform 2.0 bill to be considered later this month, he told Bloomberg Law. “We’ve had a number of discussions with folks,” including Ways and Means Committee Chairman Rep. Kevin Brady (R-Texas), but don’t know for sure if the tax credit will be included, Smucker (R-Pa.) said Sept. 5. Smucker’s bill, the USA Workforce Tax Credit (H.R. 5153), introduced in March, would provide tax credits for charitable donations to nonprofit organizations providing workforce training and education scholarships. Brady is sculpting the broader tax legislation, which could be unveiled as early as next week. House Speaker Paul Ryan (R-Wis.) has said he intends to have a floor vote on it sometime this month. The legislation comes months after President Donald Trump signed a GOP-led tax overhaul into law, a measure Republicans have touted as a catalyst for lowering the unemployment rate and increasing jobs.


  • Politico Reports: Headache for booze importers: Getting their tax cut: Brewers, distillers and vintners for months have been celebrating newly won tax relief, but it's not a cork-popping situation for everyone in the industry. Beverage importers particularly have been put in limbo as regulators try to implement last year's Tax Cuts and Jobs Act, H.R. 1 (115), which included a cut in the excise tax rates for alcohol. In fact, the Trump administration essentially has said that imported beer, wine and spirits won't get any tax cut this year, and that companies will instead have to claim that tax relief after the fact in 2019, according to industry officials. Not only that, U.S. Customs and Border Protection isn't rushing to change its processing systems to eventually allow importers to more quickly access their tax relief, because lawmakers included only a two-year version of the tax cut on alcohol in the broader tax measure. The fear for producers, said Bill Earle of the National Association of Beverage Importers, is that the alcohol tax cut will never be a priority for CBP, which is already dealing with an immigration crackdown and the increasing global trade tensions sparked by President Donald Trump. "This isn't on the commissioner's desk each day," Earle said. To be clear, the alcohol industry generally is more than thrilled with the new law, which the Joint Committee on Taxation estimates will cost $4.2 billion for the two-year version. The main priority right now for beer, wine and spirits producers is lobbying to extend the excise tax cut beyond 2019, a distinct possibility given how frequently temporary tax provisions are extended on a rolling basis in Washington. Still, the issue with imported alcohol illustrates the implementation hiccups that the Trump administration has had not just with the beer, wine and spirits portion of the tax law, but with the entire $1.5 trillion tax cut that went into effect in January.


  • House to Vote Next Week on Raising ACA Hourly Requirements: House is scheduled to vote next week on H.R. 3798, the Save American Workers Act, which would raise to 40 from 30 the minimum working hours required for mandatory Affordable Care Act coverage, according to a House calendar.
  • The U.S. Department of Labor’s Wage and Hour Division has announced that in the upcoming weeks, it will hold public listening sessions to gather views on the Part 541 white collar exemption regulations, often referred to as the “Overtime Rule.” Issued under the Fair Labor Standards Act, these regulations implement exemptions from the overtime pay requirements for executive, administrative, professional, and certain other employees. The Department plans to update the Overtime Rule, and is interested in hearing the views and ideas of participants on possible revisions to the regulations. Listening sessions will be held in the following cities:
  • September 7, 2018, 10am-12pm  Intercontinental Buckhead Atlanta 3315  Peachtree Rd NE- Trippe Room - Atlanta, GA
  • September 11, 2018, 10am-12pm  Jackson Federal Building 912 d Ave., Ste. 566 Seattle, WA
  • September 13, 2018, 10am-12pm  Holiday Inn Country Club Plaza One E 45th St, -Ballroom A/B Kansas City, MO
  • September 14, 2018, 10am-12pm  Remington Arms Room DFC- Building 41 Denver, CO
  • September 24, 2018, 10am-12pm Rhode Island Convention Center Sabin Street- Room 551A/B Providence, RI
  • There is no fee to attend the listening sessions; however, registration is required. To register for one of the sessions above, click here.
  • Bloomberg Government Reports: House Democrats Unveil ‘Future of Work’ Legislative Agenda: A group of House Democrats Sept. 5 detailed dozens of legislative ideas intended to improve worker conditions and respond to the growth of workplace technology. Reps. Mark DeSaulnier (Calif.), Mark Pocan (Wis.), Donald Norcross (N.J.), and Debbie Dingell (Mich.) issued a report that outlines legislative proposals. The topics include prohibiting mandatory arbitration clauses, bolstering antitrust enforcement, increasing the minimum wage, and boosting union density to “restore real power to employees.” The report offers a first glimpse of the House members’ findings from a series of public meetings and town halls across the country. It comes as lawmakers are seeking solutions to the nation’s skills shortage and technological changes like automation and artificial intelligence. Democrats, seeking to regain control of the House in this year’s midterm elections, have introduced bills that would raise the minimum wage and mandate paid family leave, but the measures have stalled in committee. DeSaulnier cautioned that the report includes some initial findings with more to follow. He added that Democrats will seek legislation to be introduced at the federal and local levels. Congressional Democrats also are touting a legislative agenda titled, “A Better Deal: Better Jobs, Better Wages, Better Future.” Democratic lawmakers have said the economic agenda would include rolling out a series of legislative efforts to boost employment and wages. Republicans have countered by passing legislation intended to lessen what they call job-crushing requirements on companies. That includes ushering in a new tax law, which they have said is intended to multiply the nation’s jobs.
  • Vermont Digger reports: Sanders to introduce ‘Bezos Bill’ next month: Sen. Bernie Sanders plans to introduce legislation next month to give large employers like Amazon and Walmart the choice to either pay workers a higher wage or to pay taxes equal to the total cost of federal assistance programs their workers use. The proposal aims to raise taxes from large corporations equal to the amount that the company’s low-wage employees use in federal benefit programs each year. If an Amazon employee uses $100 in food stamps, Amazon would be taxed $100. Sanders’ bill comes after the senator circulated a petition last week calling on Amazon CEO Jeff Bezos to pay all workers a living wage and to improve working conditions at the company’s warehouses. “Since Tuesday, more than 100,000 people have signed my petition to tell Mr. Bezos that they’re tired of subsidizing his businesses and are demanding that he pay his workers a living wage so that they no longer have to rely on taxpayer support to survive,” the Vermont independent said in a statement. Amazon has been criticized in recent months after a report from New Food Economy, a nonprofit news organization, showed that one-third of the company’s employees in Arizona relied on food stamps in order to afford meals. A spokesperson for Amazon said in a statement that the company could not comment on the Sanders legislation because it hadn’t seen it yet. Read more at the VT Digger.


  • Legal Sports Betting Reports: How Incoming Senator Jon Kyl Could Impact US Sports Betting: The replacement for the late Sen. John McCain has a chance of shaping the future of sports betting in the United States. Former Sen. Jon Kyl has been tapped to take over McCain’s vacant seat in the US Senate, according to media reports. So what does that have to with sports betting? Congress has been very interested in the topic of sports betting and its possible regulation at the federal level. Powerful senators from both sides of the aisle — Orrin Hatch and Chuck Schumer— have made their desire to advance legislation loudly know in recent weeks. Of course, we’ve yet to see any legislation nearly four months after the federal sports betting ban was overturned by Congress. And none of the rumored Congressional hearings have happened, either. But now we’re adding Kyl to the mix, whose history on gambling is well-known and who has an interesting tie to the leagues that want to see oversight of sports betting come from the federal government. Kyl is best known in the gaming industry for helping to move the Unlawful Internet Gambling Enforcement Act through Congress in 2006… Kyl would probably like to try to ban sports betting again rather than to regulate it federally, but that ship appears to have sailed in Congress. So, if you can beat them, join them? Read full article here.
  • Bloomberg Government Reports: Could Federal Sports Betting Standards Hurt State Tax Revenue?: Senate Minority Leader Chuck Schumer (D-N.Y.) has proposed a “desperately needed” federal sports betting framework, a move that state tax policy experts say could hurt state sovereignty and tax revenue pursuits. In an Aug. 29 News release, Schumer called for a federal framework to “protect consumers and the integrity of sports as state legislatures begin lawmaking efforts.” The release follows the U.S. Supreme Court’s May ruling in Murphy v. NCAA, which repealed the federal Professional and Amateur Sports Protection Act of 1992 (PASPA). That law prohibited states from “authorizing” gambling related to professional and amateur sports leagues. “With the Supreme Court’s ruling, it’s incumbent on the federal government to take a leadership role and provide the necessary guidance to prevent uncertainty and confusion for the leagues, state governments, consumers and fans alike,” Schumer said in the statement. “The stakes are too high—legal sports betting laws must be crafted and executed in a careful and thoughtful way,” Schumer said. “The integrity of sports is too precious to not protect as best we can.” Delaware, New Jersey, and Mississippi are now accepting sports betting wagers. West Virginia will begin taking bets Sept. 1—in time for the National Football League’s Sept. 6 opening day—while Rhode Island is expected to begin offering bets in November. New York and Pennsylvania are among the next states moving toward legalization. The tax rates vary greatly in these states, from 8.5 percent on in-person bets in New Jersey, to 51 percent on sports betting revenue in Rhode Island.


  • A Music Modernization Act Compromise Emerges — With Time Running Thin: Royalty advocacy group Songwriters of North America (SONA) may have cause to celebrate, at least according to word slipping out of Capitol Hill this morning. Earlier this week, SONA mounted a PR assault against Senator Ron Wyden (D-Oregon), whose opposition to aspects of oldies copyright protection threatened to stall the MMA once again.  But maybe that high-profile hard-balling is doing the trick. Wyden introduced an alternative bill called the ACCESS to Recordings Act that directly conflicted with the CLASSICS Act, a component of the MMA bill that deals with pre-1972 ‘oldies’ songs.  MMA advocates like multi-platinum songwriter Ross Golan say the ACCESS Act would “strip older artists and musicians of the full term of their copyright protection,” and pegged Wyden as an enemy of musicians. In a nutshell, the CLASSICS Act would widely expand federal copyright protections for recordings beyond the February, 1972 cutoff.  That’s when federal protections were first approved, with a patchwork of state laws applying to earlier works under current US Copyright Law. Read more at Digital Music News.



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