Landmark Tax Reform Bill Clears Final Vote; Enactment Could Happen in 2018

The tax reform bill cleared its final procedural hurdle today as the House voted again to approve the measure, marking the first fundamental changes to the U.S. tax code in more than three decades. The bill now goes to President Trump for signing, which he is expected to do in the coming days, although possibly not until after the new year.

“The changes in this bill, particularly the reduction in business tax rates, will help grow the economy and create jobs, which will benefit all Americans,” said ABA President and CEO Rob Nichols, who applauded the bill’s passage. “Thanks to this legislation, America’s banks will get to expand their role as the lifeblood of the economy by increasing financial services, investing in new and more convenient technologies, and opening more doors of opportunity for their customers.”

For technical reasons related to the budget, the president might not sign the bill into law until the new year. This would shift the immediate accounting implications for earnings and capital to the next quarter. Although it is a potential delay, it would give bankers more time to handle the impacts of, for example, devalued deferred tax assets. The delay, however, won’t alter the effective dates or substance of the legislation.