Senate Passes Tax Bill: Early this morning the Senate passed its version of the $1.4 trillion Tax Cuts and Jobs Act by a vote of 51 to 49, with Sen. Bob Corker (R-Tenn.) as the only Republican who voted against the bill. The vote on the bill followed the release of a manager’s amendment late yesterday evening. Some of the significant changes in the amendment included:
- Increase the deduction for passthroughs from 17.4% to 23% and extend it to publicly traded partnerships.
- Retain the individual and corporate alternative minimum tax (AMT), both of which would have been repealed under the original bill. The individual AMT exemption amounts and phase-out thresholds under current law would be increased.
- Increase the rates on the deemed repatriation of offshore accumulated earnings more closely in line with the House bill’s, to 14.5% for cash and 7.5% for non-cash.
- Allow a deduction of up to $10,000 for state and local property taxes, mirroring the House bill.
- Reduce temporarily the threshold in 2017 and 2018 for individuals to deduct medical expenses from 10% of adjusted gross income (AGI) to 7.5% of AGI.
- Phase out the provision allowing for 100% expensing rather than having it simply expire after 2022, as in the original Senate bill.
- Eliminate the provision in the original Senate bill that would treat royalties from names and logos as unrelated business taxable income.
The conference process to reconcile the House and Senate versions of the bill is expected to start soon.