In December, President Trump signed his historic tax reform bill into law, signaling a significant victory – not just for the president or his party, but for AED leadership and members who worked tirelessly to ensure that the final version of the bill contained provisions favorable to the industry. While far from perfect, the new tax law is expected to have overall benefits for dealers, customers and the heavy equipment industry as a whole.
“We always knew that there would be both threats and opportunities to equipment dealers as the tax reform process proceeded,” said Daniel B. Fisher, AED’s vice president of government affairs. “One of my goals was to ensure that Congress didn’t cause AED members to be worse off. Before it was signed into law, AED was able to get modifications that will make the new tax law a positive for construction equipment dealers and their customers, which should benefit the entire industry.”
One key area where AED’s engagement made an indisputable difference is in preserving members’ ability to take advantage of the full expensing provision.
“The House-passed tax bill prevented construction equipment dealers from taking advantage of the legislation’s full expensing provision in exchange for an increased business interest deduction,” Fisher said. “While business interest is certainly very important, as an association, it was decided that having the ability to deduct business interest up to 30 percent of EBITDA and having full expensing for new and used equipment purchases was the best scenario for AED members. Working with AED board members, we ensured that construction equipment dealers were not included in a mandatory carve-out in the Senate’s tax legislation and the final conference report. It doesn’t happen often that an issue specifically targeting construction equipment dealers is considered in Congress, but this situation highlighted what’s at stake and the importance of having a Washington presence.”
According to Michael Brennan, president and COO of Bramco and vice chairman of the AED board of directors, the outcome simply wouldn’t have been the same were it not for AED’s lobbying efforts.
“AED really made a difference for all dealers,” he said. “The relationships that we’d built really helped and, if we had not been at the table, the outcome would not have been good for our dealers.”
Both Fisher and Brennan stressed the importance of building relationships with members of Congress – preferably before needing something from them.
“It’s important to get involved and remain engaged in what’s happening in Washington,” Fisher said. “It’s really tough to make a friend in D.C. when you need one – build those relationships and have them in place so that, when you do need something, you’re not just calling out of the blue. The passage of a favorable tax reform bill shows that we had built the relationships on Capitol Hill and in the administration, and the many visits by AED members to Washington proved worthwhile. We could have easily been in a situation where construction equipment dealers were significantly worse off than prior to tax reform.”
When it comes to the power of engaging Congress, Brennan is a true believer. He’s been lobbying his members of Congress on issues that are important to the industry for more than a decade. In that time, he’s developed a particularly close constituent–representative relationship with Senate Majority Leader Mitch McConnell (and his staff), having hosted events for him in 2014 and, again, in early November.
“So many of our members think that they can’t do anything about what’s happening in Washington or that what they do won’t have an effect, so they don’t engage their senators or representatives,” Brennan said. “The outcome of the tax reform bill shows that you actually can make a difference.”
The tax reform bill may have been signed into law, but the battle is far from over. The temporary nature of some of the provisions necessitates future legislation – and AED will be working to lay the groundwork to ensure that the appropriate provisions are extended. Infrastructure and workforce development are also among AED’s top legislative priorities for 2018.
For more information on AED’s Government Affairs program, visit aednet.org/government-affairs or connect with AED on Facebook, Twitter, YouTube, LinkedIn and Google+. Also, you can follow AED’s Government Affairs program on Twitter using #AEDGovAffairs.