Washington, D.C. – U.S. Senator Catherine Cortez Masto (D-Nev.) released the following statement announcing legislation to repeal the tax deduction for local lobbying expenses. Under current law, businesses are prohibited from deducting their lobbying expenses when they attempt to influence federal and state lawmakers, but a loophole still allows for these same corporations to deduct for local lobbying expenses. This bill would close this loophole and eliminate taxpayer subsidies for lobbyists.
“It’s time we eliminate loopholes that put everyday Americans on the hook for special interests’ lobbying and backroom deals. The tax code doesn’t allow big corporations to write off their federal lobbying expenses and it shouldn’t allow corporations to deduct lobbying to influence local policy. This bill ends taxpayer subsidies for lobbyists and special interests and closes a loophole that gives unnecessary tax breaks for lobbyists. As we work on tax reform, I urge my colleagues to make sure the current tax code works for Nevada’s hardworking families, not for special interests.”
A copy of the bill can be found HERE.
Under current law, businesses generally may deduct ordinary and necessary expenses paid or incurred in connection with carrying on any trade or business. An exception disallows deductions for lobbying with respect to legislation and candidates for public office, except for lobbying expenses with respect to legislation before local government bodies (including Indian tribal governments).
Under the provision, deductions for lobbying expenses with respect to legislation before local government bodies (including Indian tribal governments) would be disallowed. The provision would be effective for amounts paid or incurred after 2017.
The Joint Committee on Taxation estimates this provision would increase revenues by $0.8 billion over 2018-2027.