Legislative update: House approves various tax and regulatory bills

U.S. House approves various tax and regulatory bills

The U.S. House of Representatives this week passed several bills—including bills relating to miscellaneous tax issues, tax administration, state and local taxes, trade, and regulations.

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The bills passed by the House include the following.

H.R. 5719, Empowering Employees through Stock Ownership Act—a bill that would promote employee ownership of startup companies by addressing the tax treatment of restricted stock units and stock options issued to employees.  Passed by a vote of 287 to 124.  

The administration has issued a Statement of Administration Policy (SAP) indicating that it “strongly opposes” H.R. 5719 because the approximately $1 billion 10-year revenue cost is not offset.

 

KPMG observation

The Senate Finance Committee this week approved a broad retirement savings bill that includes similar provisions for allowing qualified employees to defer inclusion of income attributable to qualified stock transferred to the employee by the employer.  Read TaxNewsFlash-Legislative Update

 

H.R. 2315, Mobile Workforce State Income Tax Simplification Act—a bill that would limit the authority of states to tax certain income of employees for employment duties performed in other states. Passed by a voice vote under suspension of the rules procedures that require at least two-thirds of the members voting to vote in favor of the bill.

For more information about H.R 2315, read TaxNewsFlash-Legislative Update 

 

KPMG observation

The House passed a prior version of H.R. 2315 last year. Similar legislation (S. 386) has been introduced in the Senate and has 46 bi-partisan co-sponsors.

Miscellaneous tax and trade bills

The House also passed the following miscellaneous bills under suspension of the rules procedures:

H.R. 3957, Emergency Citrus Disease Response Act—a bill that would address the tax treatment of costs associated with replanting citrus crops that have been decimated by a crippling bacterial disease.  Passed by a vote of 400 to 20.

 

H.R. 5946, United States Appreciation for Olympians and Paralympians Act—a bill that would address the tax treatment of medals or other prizes awarded to Team USA athletes during the Olympic and Paralympic games. A modification to this bill was approved last week by the Ways and Means Committee.  Passed by a vote of 415 to 1.

 

KPMG observation

The Senate passed legislation (S. 2650) earlier this year addressing the taxation of Olympic athletes.

 

H.R. 5523, the Clyde-Hirsch-Sowers RESPECT Act—or the Restraining Excessive Seizure of Property through the Exploitation of Civil Asset Forfeiture Tools Act.  Among other things, this bill would: (1) prohibit the IRS from conducting seizures relating to a structuring transaction unless the property to be seized was derived from an illegal source or the funds were structured for the purpose of concealing the violation of another criminal law or regulation; (2) require the IRS to notify individuals with an ownership interest in the property of their rights to a hearing; and (3)  clarify that interest on wrongly seized funds is exempt from income tax in certain situations. Passed unanimously.

 

H.R. 2285, Prevent Trafficking in Cultural Property Act—a bill that would aim to improve enforcement against trafficking in cultural property to prevent stolen or illicit cultural property from financing terrorist and criminal networks. Passed unanimously.

Regulatory bill

The House also passed H.R. 3438, the REVIEW Act of 2016—a bill that would require a federal agency to postpone the effective date of a rule that the Office of Information and Regulatory Affairs determines may impose an annual cost on the economy of at least $1 billion pending judicial review, but would permit such a rule to take effect 60 days after publication in the Federal Register if no person seeks judicial review during such period.  The bill passed by a vote of 244-180.  

The administration issued a Statement of Administration Policy indicating that, if the president were presented with H.R. 3438, his senior advisors would recommend that he veto the bill for a variety of policy reasons.  

What’s next?

The Senate has addressed issues similar to those presented in some of the bills. Senate action on other issues is not certain. It also is not clear whether Congress might send any tax legislation to the president between now and the end of the year.

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