WASHINGTON, DC-Wednesday, April 10th will be a big day for the Institute of Real Estate Management, to say nothing for the politicians that work on the Hill. On that day some 250 IREM members, joined by the CCIM Institution, will fan out across Capitol Hill to meet with Congress people and/or their top aides. Some 200 meetings are planned. The topic of discussion? Not surprisingly, issues of most importance to the commercial real estate community. This year those issues include, but are not limited to, carried interest and the internet sales tax.
Carried interest, or rather a change in its tax characterization, has been eyed by Washington every year for the past several years. This year the threat could be worst of all, IREM’s Chief Legislative Officer Chuck Achilles, tells GlobeSt.com. “The deficit problem this country has and even with sequestration in place, there still needs to be changes.” Carried interest, especially as it is often is associated with the hedge fund industry, is seen as a ripe target. But what many don’t realize, Achilles says, is that ” real estate accounts for almost 50% of the 2.5 million partnerships in the United States.”
Then there is the push in Congress for comprehensive tax reform – a push that appears to be a serious one. “Everything is on the table now,” Achilles says. “A scenario where carried interest is changed is becoming more plausible.”
Another issue of interest to IREM is the legislation moving through Congress that will allow states to require online retailers to collect internet sales tax from customers, even if that retailer doesn’t have a presence in the state. This has been a bone of contention for brick-and-mortar retailers, as well as Big Box retailers that have been collecting sales taxes for their online transactions, for a decade or more. Like carried interest though – but in a good way by Achilles’ lights – the time seems ripe for a change in Washington. “This is the first time the bills are similar in both the House and the Senate,” he says. Besides retailers, the states as well are interested in this bill and hope to see it passed, he continued. “When the recession hit most states were in the black, but now they are in the red. They are losing a lot of money with this tax not being collected – a tax that is not new, but that has been on the books for years.”