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Make Tax Reform Work for the Design and Construction Industry

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Architects Commend House Draft Proposal on Small Business Tax Reform

AIA Position

The American Institute of Architects (AIA) supports changes to the federal tax code that provide simplification and more competitive tax rates while ensuring incentives for economic growth through design and construction. The AIA opposes “corporate-only” tax reform that would leave pass-throughs at a severe disadvantage.

Background

Because the bulk of architecture firms are small, they are especially sensitive to changes in tax policy. In 2010 and again in 2012, the AIA helped defeat a plan in Congress to increase payroll taxes on thousands of small architecture firms that organize as S corporations. In 2011, the AIA helped repeal paperwork and tax withholding laws that would place huge burdens on small firms.

As Congress looks to reform the tax code and reduce the budget deficit, it needs to keep these principles in mind:

    Congress should pass comprehensive tax reform that lowers marginal tax rates for individuals, pass-through entities, and corporations, while broadening the tax base and simplifying the tax code. Currently, the tax law presents taxpayers, including those in the design-construction industry, with a great deal of complexity and unpredictability. Looking ahead, tax reform presents an opportunity to provide taxpayers with certainty, simplicity, and fairness, while encouraging economic growth and job creation.

    Tax policies aimed at strengthening small businesses, including tax policies that maintain the ability of businesses to choose pass-thru forms of entities, should be preserved. Tax policies should be aimed at strengthening small businesses, reducing compliance burdens, and providing certainty. Such policies would help spur economic activity by helping small businesses expand operations and drive job creation by allowing small businesses to hire new workers and increase wages and benefits.

    Tax policies should be developed with consideration given to incentivizing innovative, smart, energy-efficient, resilient development, fueling building and renovation of commercial and residential buildings and creating jobs. It is imperative that the buildings in which Americans live and work advance quality of life. As tax policies are developed, consideration should be given to whether and how they impact design and construction of next generation buildings, energy efficiency, and ensuring our communities are resilient, healthier, and more vibrant.

 

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