February 3, 2025
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NTU urges all members to vote “YES” on H.J. Res. 142 – “Disapproving the action of the District of Columbia Council in approving the D.C. Income and Franchise Tax Conformity and Revision Temporary Amendment Act of 2025.” This joint resolution would allow DC taxpayers to enjoy the full benefits from the passage of President Trump's signature legislative achievement: the Working Families Tax Cuts (WFTC). Congressional passage of this resolution of disapproval will save DC taxpayers $567 million through fiscal year 2029.
By decoupling from the federal tax code to create a local child tax credit, the DC Council would increase taxes on working families and senior citizens. Further, it would hurt the DC business community by preventing full access to enhanced special depreciation allowances and ending immediate expensing of research and development costs.
While the District of Columbia enjoys some local autonomy under the Home Rule Act, as it is the Nation’s Capital, it is still ultimately subject to federal authority. Despite the fact that the federal government has created and subsequently expanded child tax credits already that cover DC residents, the local government decided to create a duplicative benefit of its own. To pay for this, DC is planning to block its residents from receiving the wide-ranging tax cuts created by Congress last year.
This decision, if allowed to stand, would not only directly hurt DC taxpayers at all income levels, but will lower economic growth in the District for years to come. Decoupling from the core pro-growth provisions in the WFTC would markedly reduce capital investment and research and development (R&D) spending in the District. Affected employers would either reduce investment spending, or simply move to a nearby jurisdiction that allows for full implementation of these provisions. This decision by the DC Council is surprising, especially since DC has historically allowed for first-year expensing for research and experimentation expenditures, with a small shift in 2022 that was not well received. Conformity with this pro-growth provision would effectively be a continuation of long-term DC policy.
Since nearby jurisdictions would benefit from these irresponsible decisions by the DC Council, the market itself would allow for some correction if they were to take effect. But that would not help the thousands of DC taxpayers who would take a financial hit unless Congress passes this joint resolution.
Roll call votes will be included in NTU’s annual Rating of Congress and “YES” votes will be considered the pro-taxpayer position.
If you have any questions, please contact NTU Senior Policy Manager David Timmons at dtimmons@ntu.org.
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