A sizable coalition of House Republicans has advocated for end-of-year legislation addressing three key business tax provisions altered by the 2017 tax reform bill. They characterize this proposal as a pro-growth economic package. In a letter dated November 29, approximately 150 GOP members, led by Indiana Representative Rudy Yakym III, appealed to House Speaker Mike Johnson (R-LA), urging support for tax legislation encompassing the restoration of immediate research and development expensing under Section 174 of the Internal Revenue Code, bonus depreciation, and business interest deductibility under 163(j). These provisions, commonly known as the “Big Three” of the Tax Cuts and Jobs Act (TCJA; PL 115-97), garnered bipartisan support for revision in the previous Congress but were omitted from last year’s omnibus bill.

The TCJA, among its modifications, mandated amortization over a five-year period for certain research and development expenses starting in the 2022 tax year, altering the previous ability for taxpayers to deduct such expenses immediately. Additionally, it introduced a 100% bonus depreciation rate for qualified depreciable assets or property, with a scheduled phaseout commencing in 2023 (reducing to 80%). Under current law, bonus depreciation will decrease annually by 20% until reaching 0% in 2027.

Furthermore, the TCJA imposed a limit on the Code Sec. 163(j) deduction for business interest expense, effective from the 2018 tax year. This limit is set equal to the sum of business interest income, 30% of adjusted taxable income (ATI), and floor plan financing interest. Although depreciation and amortization were initially included in the ATI component, they were removed starting in 2022. During the COVID-19 pandemic, the percentage temporarily increased to 50%.

Republican lawmakers, expressing a desire to extend the TCJA, argue that it enhanced America’s competitiveness and solidified the U.S. as the premier place for business. The coalition, acknowledging that its members do not sit on the House Ways and Means Committee, nevertheless wishes to support tax writers and calls for urgent legislative action to bolster American innovation, jobs, and competitiveness.