On November 3, the U.S. House Ways and Means committee released details of its proposed overhaul of the 2018 tax code. The “Tax Cuts and Jobs Act” proposes ambitious, far-reaching tax reform, including a set of specific provisions that may have very significant cost impact on corporate relocation programs.
"The draft bill holds alarming news for the mobility industry," said Worldwide ERC® President and CEO Peggy Smith, in a news release.
In Bristol’s opinion, most concerning is the proposed repeal of critical moving expense deductions and exclusions including the shipment of Household Goods, a linchpin of cost control that our industry has relied upon for many years, along with most final move expenses and other provisions including certain mortgage costs. A repeal would add considerable gross-up costs for companies who offer tax assistance to their relocating employees, or it would add these costs directly to individuals and therefore, represent a significant barrier to relocation in either case.
The “markup” period, where changes to the bill may be considered, is taking place in Congress this week. Bristol will continue to monitor developments in Washington and keep you informed, including recommended strategies if the legislation passes in whole or in part. For example, clients with planned relocations (pack and move dates) scheduled for early January may wish to consider accelerating these to take place in December instead, if possible, while the expenses in question remain excludable.
Should you have questions or if we may assist in any way, please contact your Bristol Account Director or send your questions and comments to email@example.com.
We will continue to keep you apprised of developments on this subject and provide further details as they develop.