April 19, 2018

Tax Cuts & Jobs Act: Tax Reform Implications for Public Finance

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The U.S. Congress kept an anxious corporate sector in suspense over the final weeks of 2017, while efforts by the House and Senate to reach a bipartisan compromise on tax reform left us all guessing as to our financial fates until the very end. Public finance practitioners, includ­ing investment specialists, attorneys and other advisors to the municipal bond market, were sent particularly on edge once the news broke that the House Ways and Means committee had proposed the repeal of all tax-exempt private activity bonds.

The relief among public finance attorneys was unanimous when tax-exempt private activity bonds remained intact under the Tax Cuts and Jobs Act (the “Final Bill”), signed into law on December 22, 2017. Some bond lawyers have paused to ask why the House would want to repeal all tax-exempt private activity bonds in the first place (see Johnny Hutchinson’s pointed critique on The Public Finance Tax Blog), while others quickly moved to dissect the coming changes and alter their practices accordingly.