
Trump and many members of Congress have expressed interest in renewing parts of the Tax Cuts and Jobs Act (TCJA).
With a new president and Congress — and with full Republican control — enacting new federal tax policy appears to be high on the agenda.
President Donald Trump and many members of Congress have expressed interest in renewing parts of Trump’s signature tax bill from his first administration, the Tax Cuts and Jobs Act (TCJA). The act brought sweeping business and individual tax changes, but much of it is set to expire later this year.
The act generally lowered individual tax rates, with both corporate and privately held businesses experiencing significant reductions, as well.
Tax Cuts and Jobs Act renewal plans
While many Republicans say they want to renew much of TCJA, there is disagreement on how to fund it and how to try to pass it. Introducing an amendment requiring a revenue offset could make passage challenging and contentious.
TCJA provisions that may be renewed include the 20% deduction on qualified business income for many owners of privately held companies. Trump also has voiced support for reducing the corporate tax rate on domestic manufacturing to attract more companies to operate in the U.S.
Other possible federal tax policies that could impact transportation and logistics companies include:
Bonus depreciation
The new administration’s policy priorities include reintroducing 100% bonus depreciation, allowing transportation and logistics companies to immediately deduct the full cost of large capital investments like machinery and equipment. This measure could stimulate investment for companies looking to modernize or expand operations.
Gift and estate tax exemption
The federal gift and estate tax exemption is scheduled to be halved at the end of 2025. And while extending the exemption is in the mix for TCJA renewal, this year may still be a good time for companies and their owners to consider transferring business ownership to successors. In addition to the high gift and estate tax exemption, it’s very likely valuation for transportation companies is probably lower today than it’s been in the last 5-10 years considering the current freight recession. Learn more in our recent blog.
Ethanol and biodiesel/renewable diesel
Tax policies could also indirectly impact the renewable fuels sector, including ethanol and biodiesel/renewable diesel. Lower corporate taxes could provide more financial resources for businesses involved in producing these renewable fuels, fostering further investment and innovation in this area.
Possible federal regulation policies that could impact the transportation and logistics industry
Trump’s policy proposals that could impact transportation and logistics include instituting tariffs on imports and investing in infrastructure. Details include:
- Tariffs on imports — Trump has routinely suggested several tariffs on imports, though recently has discussed a phased-in approach. This could impact transportation and logistics on many items the industry relies on, including truck replacement parts from China. Trump’s tariff proposals include:
- Implementing a tariff of 60% on imports from China and, occasionally, Trump remarked that a higher tariff rate is possible
- A 25% tariff on imports from Mexico and Canada
- Creating a universal tariff of 10% - 20% on all U.S. imports
- Infrastructure investment — Trump has voiced support for investing in infrastructure improvements with the belief better roads, bridges, and ports could boost transportation and logistics.
How CLA can help with tax changes for transportation and logistics
CLA’s tax team is tracking the ongoing federal tax proposals and changes. Stay up to date through our tax policy resources page. Staying flexible and planning ahead can help regardless of where tax policy lands. We can help you create a proactive strategy to respond to potential tax law changes.
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