income for that year. Furthermore, starting
in 2018, at the latest, companies currently
using LIFO would have to incorporate into
their reported income, over a four-year period,
their LIFO reserves at a rate of 10% the first
year, 15% the second, 25% the third, and 50%
the fourth. Overall, this provision could cost
member companies currently using LIFO hefty
amounts in increased income taxes.
n It makes significant changes to the tax
treatment of income from subchapter S
Corporations. Under current law, active
investors in S Corps — those that physically
work for the company — must claim a “
reasonable salary” from the company for income tax
calculations but may claim the rest as investment income, which is often taxed a lower
level. The proposal would require that such a
person claim 70% of their income as self-employment income, which would be subject to
regular income and payroll taxes. The other
30% would be treated as investment income.
This may result in significantly higher tax
burdens on active participants in S Corporations. Passive investors, those who simply
invest capital but do not work at the corporation, would continue to be able to claim any
proceeds as investment income.
n The plan makes significant changes to the
accelerated depreciation schedule used by
many companies. Under current law, retail
motor fuels outlets can depreciate property
over a 15-year period. That time would be extended to 20 years, which would lower the total
amount of deductions available each year.
The Ways and Means Committee’s plan is only
a proposed approach and NACS will be meeting
with members of the committee to express our
concern regarding the treatment of these and
other provisions. As the plan is converted into
proposed legislation, we will keep you informed
of developments relevant to your business.
NACSPAC was created in 1979 by NACS as the entity through
which the association can legally contribute funds to political
candidates supportive of our industry’s issues. For more
information about NACSPAC and how political action committees (PACs) work, go to www.nacsonline.com/nacspac or
contact NACS Director of Political Relations Dana Birdsong at
NACSPAC contributors who made contributions from
February 1-28, 2014:
Shanali Shawn Bhagat
American Energy Transport LLC
EZ Energy USA Inc.
Midtex Oil L.P.
(Pit Stop Food Marts)
Redding Service Station
Todd Joseph Lassus
Lassus Bros. Oil Inc.
(Lassus Handy Dandy)
ARCO Travel Zone Center
Power Mart Corporation
Audrey L. Shearin
Eastern Petroleum Corporation
Jack Link’s Beef Jerky
Jonathan Taets has joined NACS as
its director of government relations.
Taets comes to NACS after several
years as legislative director in the
office of Congressman Leonard
Lance from New Jersey’s 7th Congressional District, where
he managed the congressman’s Energy and Commerce
Committee portfolio. Earlier in his career, Taets also served
as legislative assistant and director of communications for
New York Congressman Vito Fossella. Taets earned a BA in
political science from Hartwick College.