Senate Votes on Tax Relief Bill for IRC 174 R&E Expenditures, Bonus Depreciation and Section 163(j)

In a significant move after months of waiting, the Senate voted on the highly anticipated tax relief for American Families and Workers Act, aimed at easing the financial burden on millions of Americans. Championed by Senate Majority Leader Chuck Schumer to bring a vote in the Senate, this landmark piece of legislation promises to deliver much-needed economic relief to all businesses, but especially small to midsized businesses.

KBKG Insight:

The bipartisan bill passed the House overwhelmingly, 357-70, on January 31, 2024, and has been stalled in the Senate since. This bill includes major relief by restoring immediate expensing for IRC 174 research and experimental expenditures, 100% bonus depreciation, and IRC 163(j) interest deductions.

Certain members within the Senate have raised issues with various aspects of the bill since it arrived in the Senate back in January. 60 votes are needed to invoke cloture (a process to limit debate within the Senate) and to be able to move the bill forward to a full vote on the Senate floor.

Unfortunately, on August 1, 2024, the Senate voted, 48-44, well below the 60-vote requirement to close off debate and vote on the final passage of the bill by a simple majority. This vote was predominantly down party lines, with the Democrats voting in favor of shutting down debate to move the bill onto a final vote and Republicans keeping the debate open.