Tax Reform Round Two: Senate Reconciliation Takes a Different Path 

The Senate Finance Committee released reconciliation text on Monday. GFOA is closely monitoring the legislation and its potential impact on members. In contrast to the House proposal— which includes a temporary expansion of the Low-Income Housing Tax Credit (LIHTC) and increase in the State and Local Tax (SALT) deduction cap from $10,000 to $40,000— the Senate bill proposes a permanent expansion of LIHTC and caps the SALT deduction at current levels. Additionally, the Senate version expands the use of proceeds for small issuer exclusion, eliminates exceptions to domestic content requirements for elective pay, and includes work requirements for Medicaid. From here, the Senate will go through the "Byrd Bath" process to ensure provisions comply with reconciliation rules and continue negotiations with House leadership to reach a consensus on final legislative language. Please visit GFOA's Federal Tax Reform for more information on the bill and ongoing updates.