In brief, the plan released by the Senate would lower the tax rates for C corporations to 20%, which is similar to the approach in the House tax reform bill and something ACEC supports. For so-called “passthrough businesses” -- S corporations, LLCs and partnerships – the bill creates a new 17.4% tax deduction in an effort to level the playing field with the larger C corporations. This is also a positive step, but unfortunately the Senate bill excludes certain passthrough businesses that provide professional services – doctors, lawyers, and accountants, as well as engineering and architectural firms – from qualifying for the new deduction, with the exception of very small firms, effectively cutting out most of the firms in the state.
Definition of small firm: “The deduction does not apply to specified service businesses, except in the case of a taxpayer whose taxable income does not exceed $150,000 (for married individuals filing jointly; $75,000 for other individuals).”
The following link -- https://www.finance.senate.gov/imo/media/doc/11.9.17%20Chairman's%20Mark.pdf – provides a detailed description of the Senate bill.
ACEC Ohio has sent a letter to Senator Rob Portman, member of the Senate Finance Committee, expressing our concern with the unfairness of this proposal click here for letter.