WERC Advocates for Moving Tax Deduction Reinstatement

WERC is further ramping up its effort to reinstate the moving tax deduction and reduction as the suspension of the deduction expires on 31 December 2025.

This article originally appeared in the Q1 2024 issue of Mobility magazine.

WERC is further ramping up its effort to reinstate the moving tax deduction and reduction as the suspension of the deduction expires on 31 December 2025. The deduction was suspended along with numerous other targeted tax incentive provisions as part of the Tax Cuts and Jobs Act in order to help offset the cost of the concurrent cut in corporate tax rates. While the moving tax deduction was only suspended, we will need to advocate strongly, as targeted tax provisions will once again be on the chopping block to help offset an extension of the individual tax cuts that expire at the same time many suspended tax provisions are set to be reinstated. 

Background

As part of the Tax Cuts and Jobs Act of 2017, the moving expense deduction, and the exclusion from income of moving expense payments by employers to move their employees, were eliminated for the tax years 2017 to 2025. The deduction and exclusion together make up a vital tax relief tool that makes relocation for work more affordable and supports worker mobility—the lynchpin of a strong economy—and a moving industry that supports 480,000 jobs annually. 

The moving expense deduction was first established by Congress in 1964 and had enjoyed bipartisan support. In its last form, the deduction was already severely limited as to eligible costs and subject to stringent tests that limit its use to those employees moving substantial distances for legitimate business reasons. Specifically, it could only be claimed on an individual’s (or an employer’s) costs to move more than 50 miles for a full-time job. It is estimated to provide $1 billion in tax relief each year, which is significant to those businesses and individuals involved in a relocation but a small price considering the positive economic impact on the U.S. economy and workforce mobility.

Earlier Reinstating Efforts

WERC and the Moving & Storage Conference of the American Trucking Association (ATA) were unsuccessful in preserving the moving tax deduction during consideration of the Tax Cuts and Jobs Act as Congress looked to offset lower corporate tax rates. During the efforts for COVID-19 pandemic relief, WERC, ATA, and the International Association of Movers (IAM) advocated for reinstatement of the deduction to promote talent mobility and strengthen the U.S. economy at a time of economic uncertainty. Although Congress did not end up addressing any of the tax provisions from 2017, it was important for ATA, IAM, and WERC to remind lawmakers of the importance of the positive impact of the provisions on talent mobility and helping the global economy in preparation for the upcoming negotiations next year.

Current Efforts to Reinstate Deduction

The ATA, IAM, and WERC have formed a more formal effort, the Relocation Mobility Coalition, which is advocating for the reinstatement of the moving tax deduction, and we are currently in discussions with the National Association of Realtors (NAR), Senior Executive Association (SEA), and other organizations that have indicated support for the effort. WERC and our partners are currently expanding our coalition as well as setting the foundation through collecting data and reaching out to potential Hill champions to advocate in support of the deduction. 

To help support our cause, WERC recently conducted the “RMC Moving Expense Distance Expense Survey” in which we reached out to relocation management companies to collect data on the distance of employee relocations. This data will help substantiate the appropriate distance for the most meaningful tax relief for employers and employees for a relocation.

In 1993 and 2017, impact analyses were conducted by economists Joseph Cordes and Eugene Steuerle to examine the economic impact of the moving tax reduction. Much has changed in mobility and remote work since the last report, and the coalition will be looking to update the paper.

We Will Need Your Help in Reinstatement

Getting the moving tax deduction and reduction reinstated will be a challenge as Congress looks to offset extending the individual tax cuts from 2017. WERC and our partners will need the help of regional employee relocation councils, relocation management companies and our individual members to reach out to their members of Congress in support of reinstating the deduction. We are setting the foundation with Congress to facilitate the effort and will be providing our members with the tools necessary to do the outreach.

Be sure to attend the WERC Global Workforce Symposium near Washington, D.C., in October where we will be launching the outreach effort with meetings for attendees with their members of Congress.

Bill Protecting Transferee Sensitive Data Signed into Law

On 9 February, President Biden signed into law the Moving Americans Privacy Protection Act “MAPPA” (H.R. 1568). Enactment of H.R. 1568 marks an enormous victory for the bill champions, our industry partners, WERC, and transferees after a near-decade-long push to protect the sensitive data of transferees.
Transferees, including military personnel, are required to submit personally identifiable information (PII) including Social Security numbers, passports numbers, and other sensitive data to be part of vessel manifests when they are shipping their personal household goods to U.S. ports. U.S. Customs and Border Protection (CBP) is required to sell the manifest data on vessel shipments to data brokerage firms that post the information online to paid subscribers.

The intent of data brokers is to provide an analysis and trends on shipments to clients not intending to expose the PII of transferees. Inadvertently making public the PII of transferees exposes them to identity theft, financial fraud, and unwanted solicitations. MAPPA closes a loophole in the Tariff Act of 1930 by directing the Secretary of the Treasury to remove the PII of individuals shipping their personal household goods to the U.S. before making the vessel manifests available to data brokers.

Senators Steve Daines (R-MT), Gary Peters (D-MI), Debbie Stabenow (D-MI), and Roger Marshall (R-KS), and Congressmen Mike Walz (R-FL) and Bill Pascrell (D-NJ) as well as the leaders of the Senate Finance and House Ways and Means Committee championed the passage of MAPPA. The ATA, IAM, and WERC along with the Military Officers Association of America (MOAA), NAR, and SEA advocated for protecting the data of transferees and military personnel.

Tristan North is WERC’s government affairs adviser.