The executive officers of the state HBA’s across the country gather together during the first week in December each year, outside of the NAHB calendar. HBAI Executive Officer Jay Iverson is chairman of the EO20 group and we just met this week in Savannah. It’s an awesome opportunity to come together with a very broad range of topics and that network is critical to our various operations.
Tax Reform Last Minute Changes to Benefit our Industry?
As House and Senate conferees work to produce a final tax overhaul package, NAHB is urging congressional leadership to produce a conference report that provides the best outcome for home owners, renters and the small business community. We hope that you will join the fight.
- Adopt the Senate position on the mortgage interest deduction, which retains the principal cap for deductible interest at $1 million and the deduction for second homes.
- Continue to allow the deduction for interest on home equity loans for home repairs and improvements but under the $1 million mortgage interest cap. Both the House and Senate bills eliminate this deduction.
- Retain the deduction on property taxes paid up to $10,000, a provision that is in both the House and Senate bills.
- Maintain the exemption of capital gains tax from the sale of a primary residence, which requires home owners to live in their home for 2 of 5 years to qualify for the exemption. Both the House and Senate bills extend this time frame to 5 of 8 years. Moreover, the House bill includes an onerous and punitive income phase-out. If lawmakers will not accede to the 2-of-5-year time frame, NAHB will urge them to adopt the Senate version.
- Retain private activity bonds. While both the House and Senate bills retain the Low Income Housing Tax Credit (LIHTC), the House version eliminates tax-exempt private activity bonds, which would significantly reduce production of affordable rental housing and eliminate the mortgage revenue bond program that promotes homeownership. NAHB calls on lawmakers to adopt the Senate position.
- Accept the House position eliminating the Alternative Minimum Tax (AMT). The Senate bill maintains the AMT for individuals and corporations, albeit with higher income thresholds.
- Continue to ensure that pass-through businesses are treated fairly relative to C-Corps.
NAHB is also urging conferees to include an amendment to the conference report offered by Sen. Pat Roberts (R-Kan.) that fosters affordable housing development in rural areas. However, to pay for this, it would reduce from 30% to 25% the basis boost calculation for all LIHTC projects. NAHB is working with lawmakers to find a different method to fund it.
As we work with Congress to address our concerns, we are optimistic that NAHB will be able to support the final conference report on tax reform, and that more importantly, it will provide a net plus for small businesses, job growth, and homeownership and rental housing opportunities.
We need your voice. Please contact your members of Congress and urge them to support affordable housing, strong small businesses and tax reform that recognizes the importance of homeownership.
IBS Room Block Ends Tomorrow
Over 300 fellow Iowan’s are registered for the 2018 NAHB International Builders’ Show® (IBS) in Orlando. The Iowa room block is at the Marriott Springhill Suites, but it may be sold out. The deadline for the entire IBS room block closes tomorrow, Friday, December 8! Make plans to attend and stay nearby, it’s going to be a great show! Register and book now!
Interesting New Legal Victories for our Federation
New York Victory Years in the Making
Seven years after the Environmental Protection Agency launched a federal lawsuit against NAHB andBuffalo Niagara Builders Association member Acquest Development for alleged violations of the Clean Water Act, a federal district court has dismissed the action.
At issue was whether Williamsville, N.Y.-based Acquest discharged stormwater and fill material into “jurisdictional” wetlands without first securing federal permits.
The federal government sought to stop all future discharge activities on the 96-acre parcel, require remediation of the impacted wetlands, and impose tens of thousands of dollars in fines.
Acquest rejected the claim, arguing that the onsite wetlands do not have a “significant nexus” with a traditionally navigable water as detailed in the U.S. Supreme Court Rapanos decision and subsequent guidelines established by the Corps and EPA.
With the Department of Justice’s realization that it would be difficult to prove EPA’s claims, all charges against Acquest were withdrawn and the case was dismissed.
The long and bitter fight, and ultimate win, secured by Acquest was made possible in part through the assistance of the New York State Builders Association, Buffalo Niagara Builders Association and financial support from NAHB’s Legal Action Fund.
Idaho Builders Finally See Relief after Victory
Idaho property owners received a favorable decision in September when the Idaho Supreme Court ruled that a portion of the city of Pocatello’s water and sewer fees were illegally collected from end users and should be refunded.
In 2011, the Building Contractors Association of Southeast Idaho (BCASI) had filed an action challenging this fee as an unlawful charge. BCASI won the case in 2013, and the city agreed to stop assessing the charge on future bills. However, it refused to refund the millions it had already collected. So in 2014, the plaintiffs filed a lawsuit seeking to recover those funds from the city.
Through NAHB’s Legal Action Fund, NAHB submitted an amicus brief to support the interests of Idaho builders. In the September 2017 decision, the Idaho Supreme Court found in favor of property owners, and the case now will move back to the Idaho District Court to determine the final costs to be paid back to customers.
Section 179: Business Vehicle Depreciation Deductions
Section 179 of the U.S. tax code can present a welcome opportunity for small business owners at tax time. An economic incentive designed to encourage the purchase of business-related equipment in order to spur growth in the economy, Section 179 lets some taxpayers deduct the full or partial cost of certain types of property from their federal taxes for the year the property was purchased and put into service.
Congress approved a bill in 2015 to permanently raise the Section 179 aggregate deduction limit to $500,000 on qualifying equipment. “Qualifying equipment” in this case is defined by the IRS as machinery, computers, office furniture, software and so on. Visit the IRS website to see the list of purchases that qualify.
While many people can and do apply the Section 179 deduction to vehicles purchased for business reasons, business owners should keep in mind that there may be restrictions in place for this type of purchase.
Under Section 179, vehicles unlikely to be used for personal use qualify for the full deduction (those with a fully enclosed driver’s compartment/cargo area, for example). Passenger vehicles are subject to certain deduction limits, even if they’re used for work more than 50% of the time. Similarly, SUVs, trucks and vans that do not meet specific IRS guidelines are also subject to limitations.
If you purchased or plan to purchase a new work vehicle in 2017, you may benefit from Section 179. Consult a certified tax preparer to see the estimated Section 179 expense allowances for vehicles and use your Federation rebates on GM or Ram.
Remember, if you want to take advantage of Section 179 during the current tax year, vehicles must be purchased and put into service by Dec. 31, 2017.
The top association professionals in Iowa gathered last Friday to have breakfast with Governor Reynolds at Terrace Hill. Unfortunately her plans changed at the last moment and she was unable to join us, but it was still a wonderful time. The governor’s mansion is a lovely place to be this time of the year.