Navigating the Impending Expiration of the Tax Cut and Jobs Act

By: Andy Harig, Vice President, Tax, Trade, Sustainability & Policy Development, Legislative & Political Affairs, FMI

Will Rogers famously said “The only difference between death and taxes is that death doesn’t get worse every time Congress meets.”  Which is both true and the reason why — in the realm of financial management and auditing within the food retail industry — staying abreast of legislative changes is paramount. One such change that demands attention is the impending expiration of the Tax Cut and Jobs Act of 2017. Signed into law on December 22, 2017, this act represented the most substantial overhaul of the U.S. tax code in decades. The TCJA aimed to simplify the tax system, stimulate economic growth and provide tax relief for individuals and businesses. But as we approach 2025, the expiration of key provisions in this act brings forth a myriad of challenges for the industry.

Amidst these uncertainties, the 2024 FMI Financial Executive & Internal Auditing Conference serves as a vital platform for financial professionals in food retail to gain insights, exchange ideas and equip themselves with the knowledge needed to navigate the evolving tax landscape.

Politics Cannot Be Separated from Policy

With the sunset of certain provisions of the Tax Cut and Jobs Act looming, Congressional dysfunction, deep partisan divisions and the changes to the political landscape are all set to play a crucial role in determining the fate of tax policies. As we will discuss in our political update “Political Predictions: Legislative & Regulatory Outlook,” it's imperative to analyze how the expiration of these provisions is shaped by changing political winds and how this will impact individual companies and the industry.

Given the tie-in with an election year, the policies advocated by the Biden administration over the next six months will significantly shape the trajectory of tax legislation. Will reinstating the interest deduction and full expensing pass this year (legislation languishes in the Senate), or will these issues become part of the debate in 2025? Financial executives and auditors must anticipate potential policy shifts and adapt their strategies accordingly. Whether it's a Democratic or Republican-led government, flurries of changes can be expected, necessitating vigilance and proactive planning.

Effects on Financial Executives and Auditors 

The Tax Cut and Jobs Act of 2017 provided significant benefits to companies, including those operating in the food retail sector. However, with its expiration on the horizon, financial executives and auditors must strategically plan how to maximize the remaining time under these provisions and prepare for the post-Act landscape. This involves assessing potential restructuring of tax codes and optimizing financial strategies accordingly.  For example — while the corporate tax rate was made permanent — the pass-through deduction is up for renewal, raising the possibility that the failure to do so could severely disadvantage privately held companies.  This is just one of the significant fights that the industry needs to gear up for in 2025, but there are dozens more.

The 2024 FMI Financial Executives & Internal Auditing Conference is the perfect forum for learning about the issues that will impact your company and collaborating with your industry colleagues on a game plan for action in 2024 and 2025. Attendees can expect in-depth discussions, expert insights, and practical strategies tailored to address the challenges posed by the expiration of the Tax Cut and Jobs Act. By staying informed, proactive and engaged, financial executives and auditors in food retail can effectively navigate these challenges and position their organizations for continued success in the dynamic tax environment ahead.

Register for the event