Weekly Legislative Update July 18, 2022

TIA Signs onto Main Street Employer NIIT Opposition Letter
 
Dear Speaker Pelosi, Leader McCarthy, Leader Schumer, and Leader McConnell:
 
We, the undersigned organizations representing millions of Main Street businesses and employing tens of millions of American workers, urge you not to raise taxes on small, individually, and family-owned businesses as part of any effort to enact a reconciliation bill this year. In the face of a possible recession, 40-year high inflation, unprecedented supply-chain challenges, and chronic labor shortages, raising taxes on small, individually, and family-owned businesses is the wrong approach and should be rejected.
 
According to recent media reports, two tax increases under consideration would fall entirely on small, individually, and family-owned, closely-held businesses: 1) expanding the 3.8 percent Net Investment Income Tax (NIIT) to individuals and families who actively participate in their business, and 2) limiting the ability of small, individually, and family-owned businesses to fully deduct their losses during an economic downturn by expanding and extending the so-called “excess business loss limitation” for “noncorporate taxpayers.” Combined, these would increase revenues by more than $400 billion over ten years, shouldered entirely on the backs of small, individually, and family-owned businesses. 
 
While expanding the NIIT is sometimes characterized as closing a tax loophole and that it would increase Medicare funding, neither of these claims are true. When the NIIT was created as part of the Affordable Care Act, it was meant to apply to investment income only. The business income of small, individually, and family-owned firms where the owners ran the business was specifically exempted. This exemption was intentional and in no way constitutes a loophole. 
 
Moreover, the revenue raised by the NIIT does not fund Medicare. As the NIIT initially was adopted as part of a reconciliation bill, attributing the funds of this new tax to the Hospital Insurance trust fund would have violated the Byrd Rule. That is why the NIIT did not fund Medicare when it was adopted in 2010, and that is why attributing the revenues raised by its expansion to Medicare would violate the Byrd Rule today. 
 
As it does not close a loophole and does not fund Medicare, expanding the 3.8 percent NIIT represents nothing more than an eleven percent increase in the rates imposed on family-owned businesses. Based on Treasury data, we estimate up to 1 million small and family-owned businesses, representing over half of all pass-through business activity, would be at risk of having their rates increased under this policy. This small business tax hike would hurt the ability of businesses that survived the worst global pandemic in a century to survive in the coming months.
 
While expanding the NIIT would raise taxes on small and family-owned businesses when they are profitable, extending and expanding the “excess loss limitation” rules would hurt them in the next economic downturn. During the Great Recession, many businesses were able to survive, in part, by policies that allowed them to offset the losses they were incurring against taxes they had previously paid. This assistance was particularly important for cyclical industries such as construction, manufacturing, and travel and tourism. Extending and expanding the “excess loss limitation” rules into the future would prevent pass-through businesses from having this relief in the next recession, increasing the odds that they don’t survive. 
 
This is ill-advised tax policy, and it is being considered at a moment when the economy is no longer growing. First quarter gross domestic product (GDP) fell by 1.6 percent and many economists and forecasters predict that the second quarter GDP will also be negative. Meanwhile, the small business sector may already be in recession, as those businesses have lost employment in three out of the last four months, even as large companies have increased their employment. 
 
Raising taxes on small and family-owned businesses with the economy on the brink of a recession, a situation which is compounded by the other post-pandemic challenges they are face, harms not only these businesses but the families and communities who rely on them. We ask you to reject any tax hikes on America’s small and family-owned businesses in any legislation considered this year.
 
Sincerely,
 
Tire Industry Association and other trade associations
     
 
Electric Vehicle Charging NPRM Unveiled by FHWA
 
The Federal Highway Administration (FHWA) has released a Notice of Proposed Rulemaking (NPRM) on aspects of the electric vehicle (EV) charging formula funds program passed as part of the bipartisan infrastructure law.
 
Specifically, FHWA proposes to establish regulations setting minimum standards and requirements for projects funded under the National Electric Vehicle Infrastructure (NEVI) Formula Program and projects for the construction of publicly accessible (EV) chargers under certain statutory authorities.
 
Please let us know if you have any areas of concern or agreement with the NPRM.
 
Please contact us with any feedback, as the comment deadline is August 22.
     
 
Self Insured Plans Must Pay PCORI Fee by Aug. 1
 
Self-insured health plans are required by the Patient Protection and Affordable Care Act (ACA) to pay a fee to help fund the Patient-Centered Outcomes Research Institute (PCORI).
 
The fee for the 2021 plan year is due by August 1, 2022. The amount of the fee is based on the average number of lives covered under the plan.
 
This August 1, self-insured plan sponsors will be responsible for paying the fee for plan years ending in 2021. If the plan ended on or after October 1, 2021, through October 1, 2022 (including calendar year plans), the fee per covered life is $2.79.
 
Plan sponsors should use IRS Form 720 to pay the PCORI fee.
     
 
FCC Safety Spectrum NPRM
 
On, June 28 the Federal Communications Commission (FCC) published a Notice in the Federal Register regarding use of spectrum and a nationwide waiver (to further AV development), with a comment deadline of July 28. Link to notice here -- https://www.federalregister.gov/documents/2022/06/28/2022-13793/the-federal-communications-commission-seeks-comment-on-a-request-for-nationwide-waiver-of
     
 
Ocean Shipping Reform Act
 
TIA members have increasingly expressed concern over supply chain problems. 
 
Accordingly, we note that on June 16 the President signed into law the Ocean Shipping Reform Act of 2022. 
 
The new legislation empowers the Federal Maritime Commission to take various steps, including actions to address issues that contributed to port congestion. 
 
Of course, TIA will continue to champion efficient, uncongested and safe highways as components of efficient supply chains and a competitive U.S. economy.
     
 
Support TIA’s Government Affairs Efforts in Washington
TopGolf Challenge
 
TIA has organized a golf outing at TopGolf Las Vegas to benefit TIA’s government affairs efforts. The fun-filled day will include reserved bays, two-hours of golf, food, drinks and fun!
 
TIA serves a vital role representing all aspects of the tire industry at the state and federal levels of government protecting its members’ interests. TIA takes leadership positions on legislative matters that could impact our member’s bottom line including taxes, general business and employment issues, right to repair laws, and health
care reform.
 
Join us for a fun-filled afternoon of golf, laughter and networking for a worthy cause. There’s no pressure –whether you’re an avid golfer or have never swung a club, TopGolf is the spot for you. We hope you can join us for this afternoon of fun to support the association.
 
Sunday, October 30, 2022
2:00 p.m. – 4:00 p.m.
TopGolf Las Vegas
 
CLICK HERE for more information and sponsorship opportunities.