Tagged: Congress

2018 Primary Yields (Mostly) Anticipated Results

New Jerseyans went to the polls on June 5th to select their party’s nominees for the November elections. The most closely watched races were the primaries for the upcoming Congressional races. Nationally, Democrats see a path to gain control of the House of Representatives and possibly the U.S. Senate, but it requires that the party hold their current seats while picking up enough open seats and defeating incumbent Republicans to gain the majority. U.S. Senate As expected, incumbent Democratic Senator Bob Menendez will face Republican Bob Hugin, the former CEO of Celgene. In addition to holding Senator Menendez’s seat, Democrats must win at least two Senate seats held by Republicans in order to flip control of the Senate. House of Representatives Democrats must flip 25 seats nationally to gain control of the House. Democrats believe three of those seats could be in New Jersey, which has a delegation of seven Democrats and five Republicans. In the 2nd Congressional District, State Senator Jeff Van Drew won a contested primary to earn the Democratic nomination. He will face Republican Seth Grossman, an attorney and former local and county office holder. While Senator Van Drew was expected to win the primary, Mr. Grossman...

Key Business Provisions in the Tax Reform Law

On December 22, 2017, President Donald Trump signed into law H.R. 1 (the “Tax Act”), that enacted sweeping changes to the United States tax code. Below are some of the key sections of the Tax Act impacting businesses. These provisions are effective January 1, 2018, unless otherwise noted. Corporate Tax Rate and Alternative Minimum Tax (“AMT”) Currently, corporations are taxed at rates that range up to 35% and are additionally subject to the AMT. Corporations do not benefit from lower long-term capital gain rates. The Tax Act lowers the corporate tax rate to a flat 21% and eliminates the corporate AMT, both effective beginning in 2018 and on a permanent basis. In connection with the corporate rate cut, the Section 199 domestic manufacturing deduction is repealed going forward. The dividends received deduction is reduced from 80% to 65% and 70% to 50%, depending on ownership percentage. Increased Cost Recovery (Bonus Depreciation) Currently, taxpayers can immediately write off 50% of the cost of “qualified property” (generally, tangible personal property with a recovery period of 20 years or less). This ratio drops to 40% in 2018, 30% in 2019, and phases out after that. The Tax Act initially allows full current expensing...

Federal Tax Reform and the Potential Repeal of the Cash Method of Accounting

In the wake of the introduction by President Trump of his Tax Reform proposal on April 26, 2017, Congress, especially the U.S. House of Representatives Committee on Ways and Means, will be considering various methods to fund tax rate reductions. The White House formally delivered the President’s proposed budget to Congress on May 23, 2017. One proposal likely to be under consideration is the repeal of the cash method of tax accounting for service businesses, though many experts dispute whether many of the budget’s finer details will ever pass both houses of Congress. Under current law, the cash method of accounting cannot be used for income tax purposes by (i) businesses that sell goods and therefore must keep inventories, and (ii) C corporations with average annual gross receipts of $5,000,000 or more. A taxpayer-favorable exception from the C corporation rule is available for qualified personal service corporations, consisting of personal service corporations (PSCs) in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting, when at least 95% of the stock of such PSCs is owned directly or indirectly by employees performing services in one of such fields. To oversimplify things, this means that law firms...

21st Century Cures Act Lands in Federal Budget Blueprint

President Trump’s proposed FY 2018 Budget (a/k/a the “skinny budget”) presented a departure from his predecessor’s proposed annual budgets – namely a $54 billion increase in defense and military spending paired with corresponding cuts to virtually every other federal department. But one area President Trump did not cut was the implementation of the 21st Century Cures Act (the “Cures Act”), which also happens to be one of the last bills signed into law by then-President Obama. The FY 2018 budget blueprint proposes to appropriate $1.1 billion towards the Cures Act’s implementation in the upcoming fiscal year. The Cures Act strives to expedite the discovery, development, and delivery of new treatments and cures. Those in the medical, biotechnology, and pharmaceutical industry should look to the Cures Act as the potential game-changer that the bipartisan sponsors of the law hoped it would be. Not only does the Cures Act provide the National Institute of Health with significant new funds to speed up research into diseases like cancer and Alzheimer’s, but it also attempts to speed up the process by which new treatments are reviewed and approved by the FDA. The Cures Act also focuses on changes to the treatment of mental health and...

What You Need to Know About Federal Regulatory Reform

President Trump and the newly-elected Congress have made regulatory reform a main focus of their policy agenda. With Republicans controlling both the White House and Capitol Hill for the first time in over a decade, significant actions were taken within the first several weeks of coming into power that regulated industries should be aware of. Implementation of a Regulatory Freeze – The Trump Administration froze all federal rulemaking by issuing a policy memorandum to the Executive Branch departments and agencies. The memorandum declared that no regulations should be submitted “until a department or agency head appointed or designated by the President … reviews and approves the regulation.” The memorandum also required the Executive Branch agencies to either withdraw or postpone all agency regulations submitted to the Office of the Federal Register. The only exceptions to the regulatory freeze are for “emergency situations or other urgent circumstances relating to health, safety, financial, or national security matters” or “regulations subject to statutory or judicial deadlines.” Reducing Regulations for Domestic Manufacturing – President Trump directed the Executive Branch departments and agencies to support the expansion of manufacturing in the United States through “expedited reviews of and approvals for proposals to construct or expand...