FLA is at the forefront ensuring policy makers understand the unique operations of managing and owning timberland regarding tax policy.

The Quick Update

The Senate took a significant step toward its goal of overhauling the tax code with the passing of a budget resolution on October 20. Now both chambers are pressing forward under a tight time crunch to pass tax reform before the end of the year, with only 20 legislative working days remaining. However, for tax reform to happen, it is imperative for the House to adopt the recently passed Senate budget.  A vote in the House on the Senate budget is expected to take place on October 26th.

Writing the Actual Tax Legislation and Getting to the Details

While a tax framework was released by the White House and Republican Congressional leaders, actual legislation has yet to be introduced.  Once a budget is passed (hopefully when the House approves the Senate budget resolution), both chambers will then write out their own versions of tax legislation which will fill in many of the blank spaces to the framework released in September. Proposals will spell out exactly what House and Senate Republicans plan to do with tax incentives. It will detail income cutoffs for various tax brackets, giving Americans a chance to calculate their tax bill under the new plan. It will also show which companies qualify for a special 25% rate for “pass-through” for businesses such as partnerships and S-corporations and will spell out which tax breaks go away.

FLA Engagement

FLA has been aggressively engaged in the tax reform discussions from the beginning and has made tax policy priorities of forest landowners abundantly clear to key decision makers. A strong indication that our advocacy efforts have been successful is reflected in the tax reform blueprint, which included several major provisions that forest landowners care about, such as the elimination of the estate tax, immediate expensing of capital investments, and the 25% rate for pass-through entities. However, it is imperative that we remain vigilant in ensuring policy makers understand the unique operations of managing and owning timberland.  A prime example of why FLA’s engagement on your behalf is vital was the release by the Joint Committee on Taxation of the costliest tax breaks by sector, where timber tax breaks ranked among the costliest for natural resources and agriculture industries.

Rest assured, FLA is working not only to safeguard timber tax provisions in tax reform efforts, but that they are not put on the chopping block and seen as a “special interest” tax break.

With your support, we can stay in front of the priority issues for private forest landowners.  You can trust that we are watching out for, and advocating, for your interest in both the Trump Administration and U.S. Congress, so be cautious of speculation on what might be and might not be in proposed legislation.  We will continue to keep you informed of developments and progress on tax reform legislation as we continue to meet with senior leadership officials in both chambers to ensure that timber specific priorities will be included.

RESOURCES

FLA Timber Tax Provisions and what it could cost you
Joint Committee on Taxation Costliest Ag. and Natural Resources Tax Breaks

Advocating for Tax Provisions on Your Behalf

FLA has been engaged in meetings with legislative influencers including the Chair and Ranking Member of the Senate Committee on Finance and the House Ways & Means Committee advocating for tax provisions which benefit family forestry businesses.  Following are meetings FLA has had advocating on behalf of forest landowners on tax policy.

Senate Finance Committee
Sen. Richard Burr (R-NC)
Sen. John Cornyn (R-TX)
Sen. Orrin Hatch (R-UT) (
Sen. Jonny Isakson (R-GA)
Sen. Bill Nelson (D-FL)
Sen. Tim Scott (R-SC)
Sen. John Thune (R-SD)
Sen. Mark Warner (D-VA)
Senate Finance Committee, Senior Tax and Energy Counsel
Senate Finance Committee, Republican Tax and Oversight Counsel

House Ways and Means Committee
Rep. George Holding (R-NC)
Rep. Terri Sewell (D-AL)
Rep. Richard Neal (D-MA)
Rep. John Lewis (D-GA)
Rep. Tom Rice (R-SC)
House Ways & Means Committee, Tax Policy Subcommittee, Tax Counsel
House Speaker Paul Ryan (R-WI), Senior Tax Counsel

FLA supported the below letters of support related to tax reform.

  • September 12, 2017: Letter to Senate Majority Leader McConnell, Speaker Ryan, Chairman Hatch, and Chairman Brady supporting the inclusion of full and permanent repeal of the federal estate tax as part of comprehensive tax reform
  • April 27, 2017: Letter to Treasury Secretary Steven Mnuchin reiterating our request for the pending 2704 estate and gift tax regulations to be withdrawn.
  • September 29, 2016: Sent a Call to Engage to FLA members that resulted in 41 Members of Congress sending a letter to Treasury Secretary Lew expressing serious concerns over proposed regulations (REG-163113-02) published on August 4, 2016, under Internal Revenue Code section 2704 (“proposed regulations”) that, if finalized in their current form, will significantly increase the estate tax burden on family businesses.
  • September 22, 2016: Letter to Treasury Secretary Jack Lew opposing the Department of Treasury’s proposed changes to Section 2704 on estate and gift tax valuation discounts. These rules will significantly change family businesses’ succession plans and make it harder for family owned businesses to transition to the next generation. The changes proposed to Section 2704 would remove legitimate valuation discounts for estate, gift, and generation skipping taxes which businesses have used for the past two decades in order to prevent the IRS from overvaluing their businesses at death.
  • November 3, 2016: Sent Call to Engage to FLA members resulting in 24 U.S. House Representatives signing a letter to Treasury Secretary Lew stating the proposed rule regarding Section 2704 is not consistent with congressional intent.