ACEC’s Tax Reform Success Case Study in Delivering Value To Members

The Challenge When Congress took on tax reform in 2017, ACEC sought major tax cuts for all member firms no matter how organized All C corporation firms – including A/Es – would be eligible for lower rate; ACEC fought to include personal services corps Most member firms are passthroughs – but professional services (engineers, accountants, lawyers, doctors, et al) were excluded from tax benefits given to passthroughs in manufacturing, retail, other. Protect cash accounting, ESOPs, private activity bonds, tax- exempt municipal bonds.

3-pronged Strategy 1 – The Policy Argument As the Section 199 deduction was targeted for elimination to help pay for tax relief, compensating for this loss became a cornerstone of ACEC’s effort. ACEC made the case that, if A/E firms lost their Section 199 deduction and were also denied the new passthrough deduction, they would face a major tax increase (unlike any other industry). It would affect firms in every congressional district.

3-pronged Strategy 2 – Going It Alone Other service industries (lawyers, accountants, doctors, etc.) didn’t qualify for Section 199. U.S. Chamber of Commerce, others had “bigger” fish to fry than ACEC’s long shot provision. Hired outside counsel who previously worked on House Ways and Means to work with ACEC staff on position development and discussions with Congress.

3-pronged Strategy 3 – Mobilizing the Federation Mobilized all MOs Targeted lawmakers on tax-writing committees, as well as full Congress Generated 6,000 emails from ACEC members to Congress Lobbied Congress heavily, leveraging relationships built through ACEC/PAC

Success ACEC member firms of all business structures have access to tax relief C corp rate drops to 21% A/E firms fully eligible for new 20% passthrough deduction (not doctors, lawyers, accountants, et al) Preserved cash accounting Preserved ESOPs Preserved private activity bonds, and tax-exempt municipal bonds

National Press Reports “A Win for Engineers”  12/15/17 “A Feat by Engineers”  3/25/18  “Winners [Engineers] and Losers”  12/16/17 North Bay Business Journal (San Francisco) 3/2/18 “How did engineers get this?...It shows the strength of their lobby.” 

Not Over Till It’s Over Now working closely with U.S. Treasury on implementing regulations - no fumble on the goal line!