The House of Representative passed its tax reform bill, the "Tax Cuts and Jobs Act," by a vote of 227-205. Attention now turns to the Senate Finance Committee, which is expected vote on its tax reform proposal soon. Full Senate consideration of a tax reform bill is not expected until after Thanksgiving.

Key business provisions of the House bill include:

— Reducing the 35% corporate income tax rate to 20% beginning in 2018 and repealing the corporate alternative minimum tax (AMT), also beginning in 2018

— Modifying the current worldwide taxation system to exempt from US tax dividends from foreign subsidiaries paid from foreign earnings and tax on a current basis potentially significant amounts of foreign income under anti-base erosion provisions and modifications to subpart F

— Imposing a one-time 14% tax on accumulated foreign earnings, reduced to 7% for illiquid assets

— Allowing businesses to expense the cost of certain property placed in service after September 27, 2017, and before January 1, 2023

— Eliminating various deductions and credits, such as the Section 199 domestic production deduction, the work opportunity tax credit and the new markets tax credit (but not the research credit)

— Requiring certain research or experimental expenses to be capitalized over five years

— Limiting the tax rate applied to a portion of a pass-through entity's business income to 25%

Key individual provisions of the House bill include:

— Replacing the seven income tax brackets for individual taxpayers with four rates of 12%, 25%, 35% and 39.6%

— Repealing the individual AMT

— Limiting deductibility of interest on new home mortgages of $500,000 or more and further limiting the exclusion of gain on the sale of principal residences

— Repealing the estate tax beginning in 2025

— Limiting the individual itemized deduction for state and local taxes to $10,000 in property taxes

A Tax Alert on this development is forthcoming.