Act 86 of 2018-Automated Speed Enforcement
Member Action Needed to Address Serious Problem in House Tax Reform Bill
The House Ways and Means Committee has just released a tax reform plan that could actually raise taxes for engineering firms organized as passthrough businesses, including S corporations, partnerships, and LLCs. ACEC member firms are asked to contact their Representatives today to express their concerns about the plan. Click here for more information. You can also access a sample letter and legislative contact information by clicking on the links.
ACEC has emphasized to Congress that a reformed tax system needs to treat all businesses fairly and equitably, and supports provisions in the bill that lower the top corporate tax rate to 20 percent, and create a new 25 percent rate for passthrough businesses (such as S corporations, partnerships, and LLCs). However, engineering firms organized as passthroughs—which represent the majority of the industry— are excluded from the 25 percent passthrough rate. ACEC is asking you to let your Representatives know that all engineering firms should be eligible for lower tax rates.
For more information, contact Katharine Mottley at ACEC.
News You Can Use:
Posting on the Pennsylvania Bulletin the Proposed Regulation #16A-4711 (IRRC #2926): "Qualifications for Licensure” from the State Registration Board for Professional Engineers, Land Surveyors and Geologists.
It is available on the web at the following link:
It is also available on the IRRC website at the following link:
If you have any questions regarding the regulatory review process, the Independent Regulatory Review Commission website (http://www.irrc.state.pa.us/) can be helpful in providing you with this information.
Building a Better Gas Tax
The Institute on Taxation and Economic Policy issued a report today, Building a Better Gas Tax, which greatly enhances our industry's argument that inaction on increasing transportation funding revenue (primarily the gas tax) has hampered our ability to create jobs, move our economy and maintain the safest infrastructure possible.
One of the main findings you will note in this report is that after considering inflation, Pennsylvania's gas tax rate (including the Oil Company Franchise Tax) is already 3.5 cents lower today than it was five years ago when the tax was last raised (when OCFT reached its cap). According to the report, if efforts were made to update the gas tax rate to offset those five years of cost growth, state transportation revenues would be an additional $232 million higher per year. That is revenue lost simply due to the diminishing buying power of the current fixed, un-adjusted gas tax rate.
As you will further note, the report shows that states levying a fixed-rate tax (such as Pennsylvania) have performed far worse on average than states that adjust their tax alongside gas prices or inflation. This helps make the case for lifting the cap on the Oil Company Franchise Tax, and returning Pennsylvania to the group of 14 states levying a more sustainable "variable-rate” tax.
As you continue to speak to the Governor, legislators, chambers, civic groups and your neighbors, here is yet another piece to support our cause for new revenue.
For your reading pleasure, I have attached a link to the Building a Better Gas Tax report.
President Barack Obama has signed the 3% Withholding Repeal Bill.
As you know, this was a long-sought effort led by ACEC National to repeal Section 511 of the Tax Increase Prevention and Reconciliation Act of 2005, which mandated that federal, state and local governments withhold three percent from payments to engineering firms and other contractors for goods and services. The law (which would have taken effect in 2012) was intended to act as a tax enforcement mechanism and would have encompassed all payments for products and services contracted by federal and state governments, as well as local governments that have annual expenditures that exceeded $100 million.
This is a big victory for our industry!