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Legislative Victories for S-CORP
Legislative Victories for S-CORP
Since its inception, S-Corp has scored numerous legislative victories for America’s closely-held and family-owned businesses. In the past decade, S-Corp:
- Championed S Corporation Tax Title Into Law
For the past decade, Congress has debated an increase to the minimum wage. In 2007, they finally passed one and, as they did the last time they increased the wage, they included a list of S corporation reforms as part of the accompanying tax title. For the S Corporation Association, adoption of Sting Tax relief and other provisions was the culmination of over a decade’s worth of advocacy to make these important changes.
Key reforms included relief from the dreaded “Sting Tax”, a new interest deduction for small business trusts, and relief for S corporation banks. The S Corporation Association championed the adoption of this package, making the case that an increase in the minimum wage would disproportionately hurt S corporations and organizing a coalition of business groups to support the measure.
- Increased Deductions for Contributions of S Corporation Shares
The tax code discriminates against S corporations when it comes to charitable giving. For most donations, gifts of appreciated property produce a deduction equal to the property's fair market value. Contrary to the general rule, however, gifts of S corporation stock do not always produce a deduction equal to the stock's fair market value.
This discrimination was fixed as part of the 2006 Pension Reform Act, and represented a big victory for the S Corporation Association in its efforts to address all the tax code’s inconsistency’s when it comes to gifting S corporation shares. Now we’re focused on making this provision permanent and fixing the UBIT and capital gains tax disparities.
- Engineered Senate support to eliminate the Sting Tax!
S-Corp worked with our champions in the United States Senate, including Senators Lincoln (D-Ark) and Hatch (R-UT) to include the repeal of the onerous Sting Tax in the 2005 tax reconciliation bill.
Have you been stung by the Sting Tax? Email us here so your story can help eliminate this abusive tax. Interested in learning more? Click Here.
- Blocked unfair attempts to increase payroll taxes on S corporations!
It seems some bad ideas never die. The idea to increase payroll taxes on S Corporation income has been beaten back repeatedly since the Clinton Treasury Department first proposed it back in 1993. Yet every year, someone in the tax writing community will put this misguided idea forward as the latest plan to reduce the deficit, close the tax gap, and otherwise raise taxes to pay for additional federal spending.
Since its inception, S-Corp has led the fight in Washington to prevent this massive, unfair tax increase on the S corporation community, mostly recently blocking its inclusion in the 2005 tax reconciliation bill. Read the history of this important fight.
- Supported S corporation reform and tax relief in the American Jobs Creation Act of 2004
The American Jobs Creation Act of 2004 was a giant step forward for the S-Corp community including numerous S-Corp priorities including:
· Increasing the S corporation shareholder limit to 100;
· Members of family treated as 1 shareholder; and
· Allowing S corporation banks to have IRA shareholders.
Moreover, the Job Creation Act included numerous other S-CORP friendly provisions, including extending the $100,000 small business expensing limit for two years, providing American manufacturers with much needed rate relief, and much more.
Click here for a full description of the Jobs Creation Act.
· Supported the small business friendly provisions of the Jobs and Growth Act of 2003
S-Corp supported passage of the Jobs and Growth Act of 2003. The bill, signed into law on May 28, 2003, reduced marginal tax rates for individuals and S corporations across-the-board reduced the tax rate on investment income, including S corporation capital gains, and increased the small business expensing limit to $100,000.
Click here to read a full description of the 2003 law.
· The elimination of UBIT taxes from S corporation ESOPs
A successful 1997 public affairs/lobbying campaign resulted in key law changes contained in the Taxpayers Relief Act of 1997.
Click here to see the Joint Tax Committee's description of this legislation.
Click here to view legislative language of H.R. 2718.
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