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Resolution 554 - Tax Reform and Engineering Firms


Approved by the Public Policy Committee on November 15, 2017
Adopted by the Executive Committee of the Board on Direction on November 21, 2017

WHEREAS, efforts to simplify the tax code is a worthy goal; and

WHEREAS, the Nation's engineering industry ranges from very small, family owned firms to large companies; and

WHEREAS, these firms represent a variety of business structures, including C corporations and pass-through entities, such as S corporations, limited liability companies (LLC), and sole proprietorships; and 

WHEREAS, current law enables partners of an S corporation to determine how much of their income to classify as wages (subject to generally higher tax rates) and how much as investment income (subject to lower rates); and  

WHEREAS, tax reform proposals contain language that would exclude professional service firms from the lower rate which means that partners in an engineering pass-through firms would be forced to pay the higher individual tax rate on all their income, while partners of a pass-through firm in another industry would get the lower rate; 

THEREFORE, BE IT RESOLVED; the American Society of Civil Engineers (ASCE) believes that comprehensive tax reform should treat all business structures equally; and 

BE IT FURTHER RESOLVED that ASCE urges lawmakers to oppose proposals that would place some engineering firms at a competitive disadvantage restricting their ability to expand and create jobs.

ASCE Resolution 554
First Approved 2017