Reps. Ron Kind and Dave Reichert Introduce Tax Bills to Encourage S Corporation Growth
WASHINGTON, DC – U.S. Reps. Ron Kind (D-WI) and Dave Reichert (R-WA) recently introduced H.R. 4453 and 4454, to make permanent two temporary S Corporation tax provisions from legislation introduced earlier this Congress that were also included in the 2014 comprehensive tax reform discussion draft.
“With nearly 60,000 S Corporations in Wisconsin, supporting these job creators is a key priority of mine as I work to strengthen the economy in Wisconsin and across the country,” said Rep. Kind. “These bipartisan bills bring stability, simplicity and fairness to the tax code so S Corporations can continue to provide good jobs and help sustain local communities.”
“These are common sense reforms of our current tax code that would help proven job creators – S Corporations – to access the capital they need to grow, compete nationally and globally, and get Americans back to work,” said Rep. Reichert. “I am proud to introduce these bipartisan bills with my colleague Congressman Kind, and I look forward to continuing work towards comprehensive tax reform. Hard working Americans should be able to use the money they earn to provide for their families and enjoy the benefits of their labor, not give it away to their government because of an outdated and overly-burdensome tax code.”
The first piece of legislation, H.R. 4454, would make permanent the pre-2014 basis-adjustment rule for S Corporations that make charitable contributions of property, ensuring consistent treatment of charitable contributions between S Corporation shareholders and partners in a partnership. The second piece of legislation, H.R. 4453, would make permanent a reduction of the recognition period for the built-in gains tax on S Corporation appreciated property from ten years to five years. Both of these provisions would be effective for tax years beginning after 2013.
The provisions were part of H.R. 892, the S Corporation Modernization Act, which Congressmen Reichert and Kind introduced in February of 2013. This legislation was introduced to reform current, outdated tax law which stifles growth. As a 2011 study revealed, S corporations have a major economic impact on Main Streets across the country – employing more than 31 million Americans or one in four workers in the private sector.
“S Corporations are in every community and every industry,” observed Brian Reardon, Executive Director of the S Corporation Association. “Yet these job creators are saddled with rules that date back more than half a century. The provisions in the Reichert-Kind bill will unlock capital for thousands of businesses and encourage S Corporations to make charitable contributions. We strongly support their efforts to make this important relief permanent.”