Earlier this year, Senate Finance Committee Chairman Ron Wyden (D – Oregon) and House Appropriations Committee Chairman Jason Smith (R – Missouri) introduced House Resolution 7024, the Tax Relief for American Families and Workers Act of 2024 (the “Tax Act”).

The House of Representatives passed the tax bill on January 31 by an overwhelming margin of 357 to 70. Despite bipartisan support, the bill faced significant opposition in the Senate, with critics arguing that it focuses on short-term fixes and does not adequately address long-term budget problems.

If passed, the tax bill would include:

• Reintroduction of the aptly named “Big Three” corporate tax breaks
  • Immediate deductions for domestic research and testing costs
  • Restoration of 100% special depreciation
  • Limitations on the deduction for business interest expenses under section 163(j) of the IRC Code
• Termination of the employee retention loan with effect from 31 January
• Extended child allowances

In late July, Senate Majority Leader Chuck Schumer (D-New York) called a cloture vote to bring the tax bill to the Senate for debate and a final vote. Shortly thereafter, the Senate voted 48-44 against further action on the tax bill, falling short of the 60 votes needed to avoid a filibuster and bring it to a vote.

Although it is widely believed that the Senate will not take up the tax bill in 2024, all hope is not lost. Senator Schumer took a subtle step by voting “no” on the cloture vote. This procedural step will allow him to schedule another vote on the tax bill later in the year.

Could Senator Schumer’s call for a cloture vote before the August recess have been politically motivated? Some analysts believe that Senator Schumer called for a cloture vote to highlight limited Republican support for the tax bill, which was then confirmed by the fact that only three Republican Senators voted to bring the bill to the Senate floor. It is within the realm of possibility that vulnerable Republican Senators could change their stance on the tax bill should Senator Schumer decide to reintroduce the bill later this year.

Congress is in recess until September 9, so we expect little news on tax legislation until then. Stay tuned to claconnect.com and our real estate industry blog to stay informed of future developments.