Proposed Tax Cuts and Jobs Act of 2017: New Senate Proposal and Its Potential Impact on Tax-Exempt Bonds

Friday, November 10, 2017

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As a follow up to our recent notice regarding the House version of the proposed Tax Cuts and Jobs Act of 2017, there are new developments for consideration. On Thursday November 9, the Senate Committee on Finance released its version of the bill that, unlike the House version, does not eliminate the federal tax exemption for qualified private activity bonds, including those bonds issued for the benefit of 501(c)(3) organizations or for low income housing projects. It appears the New Markets Tax Credit program is also preserved, but like the House version, the ability to advance refund existing tax-exempt bonds, including traditional governmental issue municipal bonds, is eliminated after December 31, 2017.

Notwithstanding this positive development for private activity bond issuance, because of continuing uncertainty and ongoing revisions expected, we continue to recommend that any proposed issuances of tax-exempt bonds for projects you may be undertaking that are otherwise eligible to be issued by December 31 are, in fact, closed in that timeframe.

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