On Tuesday, May 30, 2017, when the DC Council met to consider and proceed on its first of two votes on the FY 2018 Budget and Financial Plan, we saw the proceeds of hard work and advocacy for business friendly policies pay off. The business community prevailed in maintaining about $100 million dollars of scheduled tax cuts proposed by the DC Tax Revision Commission – about 19 percent of the tax cuts go towards ensuring the DC corporate franchise tax is reduced to the 8.25% rate. Further increasing our competitive economy by lowering the business tax rate to that of the neighbor state of Maryland.
After laboring toward maintaining progressive tax reform and keeping the corporate tax low throughout this year’s budget process, the DC Chamber and its team of dedicated individuals fought off multiple amendments by Councilmember David Grosso which would have raised taxes. Councilmember David Grosso’s two amendments would have reversed the estate tax proposal to bring the District’s $2 million estate tax threshold up to the $5 million federal level. It would have also split the business tax cut so that companies who bring in more than $10 million in revenue would not receive the tax relief in January 2018 like other businesses.
The Chamber vigorously opposed these amendments and both amendments failed. The effort to repeal the estate tax failed 9-4 and the effort to split and defer the business franchise tax failed 10-3 with Councilmember’s Grosso, Silverman and Brianne Nadeau being the only Councilmembers to vote to increase the corporate tax and delay its implementation.
In addition to lowering the business franchise tax rate, about $60 million of the scheduled cuts will benefit individual residents. With increases in the standard deduction from $5,650 for sinlges, $7,800 for heads of households and $10, 275 for married couples to the federal level, coupled with the personal exemptions increase from $1,775 to $4,000 and the repeal the low income credit, the overall tax reform package supports tax relief for low to middle-income residents, as well as, conforms the District’s estate tax to the federal threshold.
“Yesterday was a great day for the business community and individual tax payers. We are pleased that the D.C. Tax Revision Commission recommendations will be fully implemented by January 2018 as scheduled. All’s well that ends well as D.C. continues to strive to be the best place to live, work, and do business, ” said Vincent Orange, D.C. Chamber of Commerce President & CEO.
As the voice of the business community, the DC Chamber works hard to ensure the District of Columbia is the best place to live, work, and do business. The DC Chamber's hard work and advocacy is paying off. The City Council recognizes that the business community is a constituency and our efforts show that we will advocate for business friendly policies and push back against those that would have an adverse impact to our economy. As employers, we support the local tax base, and we are the key drivers of job growth in the District of Columbia. Our concerns should be addressed and we should be engaged as a true stakeholder.
During the next coming weeks, the DC Chamber will continue to advocate for business friendly policies in preparation for the DC City Council’s second vote on June 13th.
Special thanks to DC Chamber policy staff, Ms. Erika Wadlington; the Federal City Council team Mr. Kevin Clinton and Mr. Kevin Wregne; the DC Policy Center; and Mayor Williams for his leadership on this issue as well. We would not have this accomplishment without the efforts of these partners, local business groups and our members. Together we are strong.
For more information about the Chamber’s advocacy efforts please contact email@example.com