BOMA International Advocacy Update

BOMA San Francisco Members:

Please take a moment to review a brief advocacy update from our BOMA International Team:

Proposed Lease Accounting Standards to Cost 190,000 American Jobs

A coalition of several leading nonprofit and commercial organizations, including BOMA International and the U.S. Chamber of Commerce, released a report today that examines the economic impact of the International Accounting Standards Board (IASB) and Financial Accounting Standards Board’s (FASB) proposed lease accounting standard. The study, The Economic Impact of the current IASB and FASB Exposure Draft on Leases, specifically looks at how the proposed standard would negatively impact job creation, the health of the U.S. real estate sector, and liabilities of U.S. publicly traded companies. The report analyzes the current proposal and under a best case scenario estimated its economic impacts as: 

• Increasing liabilities for U.S. public companies by $1.5 trillion; 
• Increasing costs to U.S. public companies by $10.2 billion annually; 
• Potentially leading to job losses of over 190,000; 
• Reducing U.S. household earnings by $7.8 billion annually; and 
• Lowering U.S. GDP by $27.5 billion each year annually. 

Read the full press release. 

Carried Interest 

As expected, Congressman Sander Levin (D – Mich.) introduced carried interest legislation for the 112th Congress. The Carried Interest Fairness Act of 2012 would change the characterization of carried interest from a capital gain to ordinary income. Just a day earlier, President Obama introduced his budget, which includes a similar tax change. Neither proposal is expected to get much traction in its current form, but continues to be seen by many as a possible revenue off-set to other measures Congress may consider that add to the nation’s deficit.

Senate Hearing Focuses On Future of Tax 'Extenders'

The Senate Finance Committee recently held a hearing titled “Extenders and Tax Reform: Seeking Long-Term Solutions,” which focused on the large number of tax “extenders” that Congress continues to pass on a short term basis. Included in the package of extenders is the 15-year leasehold depreciation provision, which, along with the rest of the tax policies included in this group, expired at the end of 2011 and has yet to be addressed in 2012. The majority of the members of the Committee were apprehensive about not extending these provisions while in an economic recovery, but indicated a need to study the merits of each one moving forward. The Depreciation Fairness Coalition, of which BOMA International is a member, filed comments encouraging extension of the 15-year depreciation provision as well as its need to be made a permanent part of the tax code.