Tax Back on the Front Burner

This week, both houses of Congress returned to Washington from a weeklong recess to begin a three-week sprint until the Easter break. The focus will be on forging a compromise budget resolution that will need to pass both chambers in order to kick start the process of developing a budget reconciliation bill that will be the vehicle to reviving and extending the Tax Cuts and Jobs Act tax benefits, among other items. Both House and Senate have passed their own budget resolutions, but the measures were markedly different. Notably, the Senate’s version does not include a tax component. All indications are that a compromise resolution will be comprehensive and include language renewing and extending the 100 percent bonus depreciation benefit that has been phasing out, the research and development tax credit that has expired and the Section 199A deduction for S-Corporations and other pass-through structures that will expire at the end of this year. Congressional leaders hope to wrap up the budget resolution process and finalize and pass a single, comprehensive budget reconciliation bill before Memorial Day.

The Hardwood Federation team has been attending fundraisers and meeting with Members of Congress and their staff advocating support for renewing these key business tax incentives.  

Safe Routes Act Reintroduced

In mid-March, Representative Tony Wied (R-WI) reintroduced the Safe Routes Act. This common sense, practical legislation would allow trucks traveling at the maximum gross vehicle weight on state roads to access the federal interstate highway system for short distances when it makes sense to do so. As we know, many states allow 5 axle rigs heavier than 80,000 pounds to travel on state roads. Unfortunately, federal highways are hard capped at 80,000 pounds. This results in trucks having to traverse narrower roads through small towns and cross walks on their way from the harvesting site to the sawmill when a safer, more efficient route could be available on the interstate.

Rep. Wied is a member of the House Transportation and Infrastructure Committee which will hold the pen in crafting a surface transportation reauthorization bill—also known as the Highway Bill—later this year and next. Already key industry champions like Glenn “GT” Thompson (R-PA) have signed onto the bill, as have T&I Committee members Mike Ezell (R-MS) and Mike Collins (R-GA). Rep. Jared Golden (D-ME) is also on the bill. The Hardwood Federation team will be working hard to build out the cosponsor list on this legislation in hopes of having its provisions included in the Highway Bill rewrite. We will keep you posted on progress.

Waiting on Trade Announcements

The Trump Administration is poised to announce their plans to impose reciprocal tariffs on global trading partners next Tuesday, April 2. How these will look, who will be targeted, and for how long are all outstanding questions.  While the President said yesterday that tariffs rates will be lower than expected, tariffs will still be implemented next week. Tariffs of 25% on imported cars will also become effective on April 2.  In anticipation of the announcement, U.S. Trade Representative Jamieson Greer met with his Chinese counterpart this week for a “frank discussion.” Canada, Japan, and the E.U. have been more vocal about taking retaliatory action. The Federation will continue to track this issue and update you on developments.