ACEC Member Testifies On Tax Policy Priorities

Tom Pace, CFO of Thomas & Hutton and Chair of the ACEC Tax & Regulatory Affairs Committee, testified in front of the House Ways and Means Committee Main Street tax team on the importance of the Section 199A passthrough tax deduction to the engineering industry. The roundtable discussion was part of the Ways and Means Committee's overview of tax provisions that will be up for debate in 2025 when significant portions of the 2017 Tax Cuts and Jobs Act (TCJA) expire.

The Section 199A deduction was created as part of TCJA at the same time as the corporate tax rate was lowered from 35 percent to 21 percent. This balanced tax treatment of all business structures is essential to ACEC because its membership is a mix of C corporations and passthrough entities, such as S corporations, partnerships, and LLCs.

Pace's statement discussed how Section 199A has given Thomas & Hutton the financial flexibility to increase salaries as a workforce retention measure. In addition, he provided the legislative history of why engineering and architecture are treated differently than other professional services that do not have full access to the deduction.

ACEC also submitted comments to the Ways and Means tax teams on all of the Council's priorities in the 2025 tax debate and is engaging with all House and Senate tax-writers to ensure that the engineering industry's concerns are front and center.