Last Thursday, Republicans in the U.S. House of Representatives narrowly passed a budget reconciliation bill, which includes key pro-growth business tax provisions long supported by the PA Chamber. After weeks of internal GOP negotiations and an all-night voting session, the legislation moves to the U.S. Senate for concurrence following a 215-214 vote in the lower chamber.
The House-passed bill permanently extends the 2017 Tax Cuts and Jobs Act (TCJA), expands and makes permanent the Section 199A pass-through deduction for small businesses, and renews full and immediate expensing for capital investments and research and development costs.
The package also reduces the paperwork burden for small businesses and workers by increasing the 1099-MISC reporting threshold from $600 to $2,000 and increases the cap on state and local tax (SALT) deductions to $40,000 per household, with an income limit of $500,000 — a change advocated for by Republican members from high-tax states.
A 42-page manager’s amendment — added shortly before final passage — helped secure enough votes by moving up the start date of Medicaid work requirements and scaling back clean energy tax credits from the 2022 climate law in exchange for the SALT changes.
All but three Republicans voted for the bill, with two voting “no” (Rep. Thomas Massie of Kentucky and Rep. Warren Davidson of Ohio) and one voting “present” (Rep. Andy Harris of Arizona). Two other Republicans sat out the vote (Rep. David Schweikert of Arizona and Rep. Andrew Garbarino of New York). No Democrats supported the measure.
The PA Chamber has been a vocal advocate for extending the pro-growth provisions of the 2017 Tax Cuts and Jobs Act. The House-passed reconciliation bill aligns with our longstanding support for tax policies that strengthen economic competitiveness and promote private-sector investment and job creation.
We are closely monitoring Senate negotiations and will continue advocating for these pro-growth reforms on behalf of Pennsylvania’s business community.
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