With the Senate back in town this week, here’s a quick recap on the status of the S Corp reform tax title we’ve been advocating in Congress:
- First, on January 10th, the House passed a clean minimum wage increase and sent the legislation to the Senate.
- Second, on January 31st, the Senate added by voice vote $8 billion worth of small business tax provisions to the House wage increase, including an S Corporation Reform tax title incorporating several S Corp priorities.
- Third, on February 16th, the House adopted its own $1 billion small business tax relief alternative to the Senate package. This package failed to include any S Corporation provisions.
- Fourth, Senate Republicans insisted that the House meet them to “pre-conference” the differences between the Senate and House small business tax packages before they would allow the two bills to go to a conference committee for negotiation.
- Fifth, on March 23rd, the House added its $1 billion small business tax package to the Iraq War supplemental spending bill, despite the fact that a veto threat currently hangs over that bill’s future.
- Sixth, on March 27th, the Senate added its own, larger $12 billion small business package, including the S Corporation Reform tax title, to its version of the Iraq War supplemental spending bill.
- Seventh, on March 29th, Senate Majority Leader Harry Reid appointed members of the Appropriations Committee to the House/Senate conference and did NOT appoint Senate Finance Committee Chairman Max Baucus signaling the potential for conference negotiators to drop the tax bill from the supplemental bill to deal with it separately, at a later date.
And that’s where things stand, awaiting the return of the House from recess next week and the appointment of House conferees to work out the differences between the House and the Senate on these bills.
It almost goes without saying that the S Corporation Association is continuing to press our friends on the Hill to end this stalemate and pass these much needed reforms to the rules governing S corporations. We remain confident that these provisions will be enacted, it’s just a question of how long the process will take.
S Corp Gets Some Ink in INC.
S Corp President Stephanie Silverman is quoted this month in INC. Magazine as part of a story on the new congressional leadership, “Learning to Love Nancy Pelosi.” As the story notes, business groups like the S Corporation Association are having to reconfigure their approach and expectations to reflect the new Democratically-controlled Congress. Here’s Stephanie:
- In the last Congress, there was a serious effort to abolish the estate tax. Today, Congress is considering bolstering the Internal Revenue Service’s budget for business audits and levying new payroll taxes on S corps. Stephanie Silverman, the president of the S Corporation Association, says the group’s members are nervous about the payroll tax idea. The group is currently scheduling meetings with members of the House Ways and Means Committee to discuss the plan. “We’re trying to make them aware of how many S corporations there are in their states,” Silverman adds.