Thursday, December 21, 2017

Congressional tax reform passes with impact on cities

After weeks of debate, the U.S. House and Senate reached an agreement on tax reform this week. 

South Carolina city officials immediately got engaged with contacting the state's Congressional delegation back in early November when the initial House bill was introduced. More than 40 Mayors quickly signed a letter to the delegation members pointing out the negative impact of several provisions of the bill.

According to information compiled by the National League Cities, the final bill is still a step back for cities and local decision-making, but did preserve several key revenue resources in the final conference report. 

Highlights are below. Get more detail from NLC's fact sheet
  • Publicly-Issued Municipal Bonds - preserved 
  • Private Activity Bonds - preserved
  • State and Local Tax Deduction - $10k cap on a combination of property taxes and either income OR sales taxes
  • Historic Tax Credit - preserves the credit for rehabilitation costs on certified historic structures, but repeals the 10 percent credit for non-certified buildings built before 1936.
    South Carolina Senators Scott and Graham were both leading advocates for preserving the Historic Tax Credit.
  • New Markets Tax Credit - preserved until authorization expires in two years
  • Advance Refunding Bonds - eliminates the tax exemption for interest earned on one-time refunding bonds. 

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