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Permanent Tax Relief for Passthrough Entities Introduced

Stephanie Salmon

The Main Street Tax Certainty Act of 2021 (H.R. 1381/S.480), which would make the current 20% tax deduction available to passthrough entities permanent, was recently introduced in Congress. AFS strongly supports this legislation and is working with a coalition of over 80 business groups to advocate in support of it. 

AFS actively advocated for the passage of the tax bill signed into law at the end of 2017 (Public Law No. 115-97) because it provided subchapter S corporations, also known as “passthrough” corporations, with more favorable tax treatment. The law includes a tax deduction in Section 199A for owners of small businesses, reducing the potential tax burden on metalcasters that organize as passthroughs. Many AFS members are organized as S corporations.

Unfortunately, unlike the permanent tax relief provided in the law to entities organized as C corporations, the passthrough deduction is temporary. As a result, the benefit for eligible AFS members will no longer be available after December 31, 2025. AFS is working to build strong bipartisan support for the bill in Congress so that it passes well before its scheduled sunset date in 2025.     


Senate Committee Advances Bipartisan Water Infrastructure Bill 
The Senate Environment and Public Works committee approved a bipartisan $35 billion water infrastructure measure by a unanimous vote on March 24, as lawmakers are pushing for major investments in the nation’s water systems to be part of an infrastructure stimulus bill. AFS strongly supports this legislation.

The measure, the Drinking Water and Wastewater Infrastructure Act of 2021, would reauthorize the Drinking Water State Revolving Fund at enhanced levels, increase the focus on small and disadvantaged communities in federal grant and loan programs, promote water utilities’ sustainability and resilience efforts. It also includes several provisions that aim to address the dangers of lead pipes in the drinking water system, including increasing the authorization of EPA’s lead reduction grants program to $100 million annually. A number of foundries supply critical castings for drinking and wastewater systems across the nation.

The Drinking Water and Wastewater Infrastructure Act now awaits consideration by the full Senate. On the House side, there are a pair of measures that would invest far larger sums than the Senate measure, with drinking water (LIFT Act) and wastewater programs (Water Quality Protection and Job Creation Act of 2021) both getting $50 billion. These House bills are likely to be voted on this spring.   

Legislation Introduced to Reform Section 232 Investigations

In March, a bipartisan group of lawmakers introduced legislation, the Trade Security Act of 2021, to reform the law that authorizes Section 232 investigations and tariffs. The bill would:

  • Split the Section 232 process into an investigation phase led by the Department of Defense (DOD) and a remedy phase led by the Department of Commerce (DOC).
  • Require the DoD (rather than the Commerce Department) to justify the national security basis for new Section 232 tariffs.
  • Expand the process whereby Congress can disapprove of a Section 232 action to include all types of products.
  • Require consultation with Congress throughout the Section 232 process.

Former President Donald Trump used the Section 232 law to justify the tariffs on billions of dollars’ worth of imports on national-security grounds.  Since June 1, 2018, Section 232 tariffs of 25% on steel (not iron and steel castings) and 10% on aluminum imports (includes aluminum castings) were imposed for almost all countries, with some exceptions.

Biden administration officials at the Commerce Department have noted that data show the tariffs have “been effective” and left open the possibility that they would be maintained after the Biden administration completes a review process of both the Section 232 and 301 tariffs in place.   

For additional information, contact Stephanie Salmon, AFS Washington Office, 202-842-4864, ssalmon@afsinc.org.