Washington D.C. Examples of Tax Reform Good News

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Posted by John Kartch on Thursday, December 5th, 2019, 9:00 PM PERMALINK

Thanks to the Tax Cuts and Jobs Act passed by the Republican congress and signed by President Donald Trump, 90 percent of wage earners have higher take-home pay.

Below are several examples of tax reform good news in Washington, D.C. (Additions to this list can be sent to jkartch@atr.org)

Right Proper Brewing Company (Washington, D.C.) -- The Tax Cuts and Jobs Act allowed the company to keep beer prices low:

At Right Proper Brewing Company in Washington, D.C., the tax cut saved the company more than $13,000. The brewery produces roughly 600 barrels annually at its restaurant and another 3,200 barrels at its production house in Northeast D.C., which opened in December 2015, co-owner Leah Cheston said.

 With the rate of $3.50 per barrel, the reduced federal excise taxes have allowed Cheston to keep prices at Right Proper's brewpub low, especially when compared with other restaurants in the area.

 "It's prevented us from having to raise prices because everything increases constantly," she said. "To get that break is great. As a small business, every little bit counts." -- Sept. 26, 2019 Washington Examiner

Pepco (Washington, DC) – The utility will pass along tax savings to customers:

Pepco today announced they will file with the Public Service Commission of the  District of Columbia in early February, outlining plans to provide annual tax savings to more than 296,000 electric customers in the District of Columbia. If approved, Pepco would plan to begin providing a credit lowering customer bills starting in the first quarter of 2018.       

The tax savings are the result of federal tax reductions under the new Tax Cuts and Jobs Act, which was signed into law on Dec. 22, 2017, and became effective on Jan. 1, 2018. The decrease in the Corporate Tax Rate from 35 percent to 21 percent reduces the amount of federal income tax Pepco will have  to pay. 

“The tax law will result in lower bills for our customers and lower taxes for Pepco,” said Dave Velazquez, President and CEO, Pepco Holdings, which includes Pepco. – Jan. 5 2018, Pepco press release

MidCity (Washington, D.C.) -- The company is building an apartment complex in an Opportunity Zone created by the Tax Cuts and Jobs Act:

A new 108-unit apartment building at 1400 Montana Ave. NE is among the District's first projects under the federal government's new opportunity zone program, enacted as part of the Tax Cuts and Jobs Act of 2017. Under the program, anyone who invests in a designated "opportunity zone" — typically economically distressed neighborhoods — can receive tax incentives. Mayor Muriel E. Bowser (D) designated 25 locations in the District as opportunity zones, including the Brentwood neighborhood in Northeast.

MidCity, which has developed more than 15,000 units across the United States and owns about 9,000 units in the District and in Maryland, is financing 1400 Montana with its first opportunity fund. Construction is anticipated to begin in spring 2020 and be complete by the summer of 2021.

The project will include 11 affordable units available to households earning 60 percent of area median income, which is $121,300 for a household of four in the D.C. metro area. Eligibility requirements are based on household size as well as income. The apartment building will have a roof terrace, a fitness center, a lounge for residents and workspaces, as well as parking for 34 cars.

The new project is adjacent to MidCity's 20-acre Brookland Manor property, which is being redeveloped in several phases into RIA, a mixed-income, mixed-use project that will eventually have 1,800 residential units. That site is also designated as an opportunity zone, which will assist MidCity, along with charitable and public financing, in supporting community development and infrastructure improvements. -- July 10, 2019 Washington Post article

EJF Development -Washington, DC (Washington, D.C.) -- The company announced they will be building a 262-unit mixed-use, mixed-income, multifamily community located in an Opportunity Zone created by the Tax Cuts and Jobs Act:

EJF Capital LLC ("EJF"), Donatelli Development ("Donatelli") and Blue Skye Development today announced the development of a 262-unit mixed-use, mixed-income, multifamily community in the Hill East neighborhood of Southeast Washington, D.C. Hill East is a 67-acre master planned development in an area certified as an "Opportunity Zone" under the Tax Cuts and Jobs Act of 2017 ("TCJA") which offers investors attractive tax benefits to create economic growth. The approximately $95 million project is under construction and is expected to be completed in August 2020. Eagle Bank is providing $59.5 million of construction financing.

Located adjacent to the Stadium-Armory Metro station at the corner of 19th Street and Massachusetts Avenue S.E., the project is only 1.6 miles east of the U.S. Capitol and offers easy access to major employment areas throughout Capitol Hill and downtown Washington D.C. The project will also offer 13,000 square feet of retail.

"We are thrilled to partner with Donatelli Development on this project. Hill East is a major Opportunity Zone development that will transform the area just east of Capitol Hill and west of the Anacostia River," said EJF Co-founder and Chief Operating Officer, Neal Wilson. "This anchor project will make a major contribution to the neighborhood by adding hundreds of construction jobs and creating the momentum necessary for the successful long-term growth of the Hill East neighborhood." -- May 29, 2020 press release

Enlightened (Washington, D.C.)  – Moving locations in Washington D.C. as a direct result of the Tax Cuts and Jobs Act, which allows the company to be closer to their customers:

Hope is building at the corner of MLK Ave and Good Hope Road in Southeast. 

For the first time in more than 50 years, a large company will move across the Anacostia. It is a direct result of a portion of the Tax Cuts and Jobs Act of 2017: Opportunity Zones.

Will it be a boom or a sign of change for the residents of Ward 8? In this project, the hopes of an entrepreneur and community ride together.

Antwanye Ford thinks there is a positive way to redevelop impoverished neighborhoods in D.C. In fact, he is willing to bet on it. 

The CEO of tech firm Enlightened is prepared to move his K Street business to the corner of MLK and Good Hope.

"For me I am closer to my customers in Northwest," Ford said. "I’m closer to my home so for me moving (to Ward 8)."

"It’s gonna be less convenient because it’s more important for me to be here." – February 1, 2020, WUSA9 Article.

Washington Gas Light (Washington, DC) – The utility will pass tax cut savings on to customers:

The legislation cuts the federal corporate income tax rate from 35% to 21% effective January 1, 2018. This tax cut, in turn, reduces the cost of service for many of Virginia’s major electric, gas and water utilities. Utility rates paid by customers are based on the cost of service.

To preserve the savings from this tax cut for customers, the Commission ordered all applicable Virginia utilities to account for the tax savings by accruing a regulatory liability on the utility’s books. The tax savings will thus be quantified and available to be passed on to customers in subsequent rate proceedings.

The utilities subject to the Commission’s order serve millions of Virginia residential and business customers. They include Virginia-American Water Company; Aqua Virginia, Inc.; Washington Gas Light; Columbia Gas of Virginia; Virginia Natural Gas; Roanoke Gas; Atmos Energy; Southwestern Virginia Gas; Appalachian Natural Gas Distribution; Kentucky Utilities; Appalachian Power Company; and Virginia Electric and Power Company. –January 8, 2018, Virginia SCC Press Release

Walmart - Washington D.C. employees at 3 Walmart stores received tax reform bonuses, wage increases, and expanded maternity and parental leave. Walmart employees who adopt children will be given $5,000 to help cover expenses.

Starbucks Coffee Company (91 locations in Washington, D.C.) – $500 stock grants for all  retail employees, $2,000 stock grants for store managers, and varying plant and support center employee stock grants, totaling more than $100 million in stock grants. Nationally, 8,000 new retail jobs and 500 new manufacturing jobs; an additional wage increase this year, totaling approximately $120 million in wage increases, increased sick time benefits and parental leave.

T.J. Maxx – (Four locations in Washington, D.C.) – Tax reform bonuses, retirement plan contributions, parental leave, enhanced vacation benefits, and increased charitable donations:

The 2017 Tax Act benefited the Company in the fourth quarter and full year Fiscal 2018. The Company expects to continue to benefit from the 2017 Tax Act going forward, primarily due to the lower U.S. corporate income tax rate. As a result of the estimated cash benefit related to the 2017 Tax Act, the Company is taking the following actions:

Associates

  • A one-time, discretionary bonus to eligible, non-bonus-plan Associates, globally
  • An incremental contribution to the Company’s defined contribution retirement plans for eligible Associates in the U.S. and internationally
  • Instituting paid parental leave for eligible Associates in the U.S.
  • Enhancing vacation benefits for certain U.S. Associates

Communities

Made meaningful contributions to TJX’s charitable foundations around the world to further support TJX’s charitable giving – Feb. 28, 2018 The TJX Companies Inc. press release excerpt

AT&T $1,000 bonus to 222 D.C. employees; Nationwide, $1 billion increase in capital expenditures.  

Apple (One store location in Washington, D.C.) -- $2,500 employee bonuses in the form of restricted stock units; Nationwide, $30 billion in additional capital expenditures over five years; 20,000 new employees will be hired; increased support of coding education and science, technology, engineering, arts, and math; increased support for U.S. manufacturing.

Lowe's -- 150+ employees at one store in Washington, D.C. -- Employees will receive bonuses of up to $1,000 based on length of service, for 260,000 employees; expanded benefits and maternity/parental leave; $5,000 of adoption assistance

Ryder (One location in Washington, D.C.) - Tax reform bonuses for employees.

Best Buy -- Two stores in Washington, D.C. - $1,000 bonuses for full-time employees; $500 bonuses for part-time employees.

Bank of America (Three locations in Washington, D.C.) - $1,000 bonuses. 

Home Depot - One location in Washington, D.C., bonuses for all employees, up to $1,000.

Dollar Tree, Inc. (Multiple locations in Washington, D.C.) Nationwide, $100 million investment in raising base wages, enhanced benefits, including maternity leave for qualifying employees and employee training. 

Waste Management Inc. (Locations in Washington, D.C.) -- $2,000 bonuses:

In light of the meaningful contributions of its employees and the new U.S. corporate tax structure, the company will distribute US $2,000 in 2018 to every North American employee not on a bonus or sales incentive plan; that includes hourly and other employees.

“We are about to get a tax benefit as our U.S. corporate tax rate goes from 35 percent to 21 percent. In considering how to best spend that, we wanted to find a way to help grow our economy, which in turn, will help grow our business, and give some of the tax savings back to those hardworking employees who do not get the opportunity to participate in our salaried incentive plans,” said Jim Fish, president and chief executive officer, Waste Management.

“So, we are offering each North American hourly full-time employee and salaried employee who does not participate in any sales incentive or bonus plan during 2018, a cash bonus of US $2,000 to show our appreciation to so many of our valued employees while growing our business and returning a good portion of the tax savings directly to the overall economy,” he continued. – Jan. 10 2018, Waste Management Inc. press release excerpt

Chipotle Mexican Grill (Multiple locations in Washington, D.C.) - Bonuses ranging from $250 to $1,000; increased employee benefits; $50 million investment in existing restaurants.

U-Haul (Multiple locations in Washington, D.C.) - $1,200 bonuses for full-time employees, $500 for part-time employees.

FedEx (Multiple locations in Washington, D.C.) – Accelerated and increased compensation; pension plan contributions:

FedEx Corporation is announcing three major programs today following the recently enacted U.S. Tax Cuts and Jobs Act:

  • Over $200 million in increased compensation, about two-thirds of which will go to hourly team members by advancing 2018 annual pay increases by six months to April 1st from the normal October date. The remainder will fund increases in performance- based incentive plans for salaried personnel.
  • A voluntary contribution of $1.5 billion to the FedEx pension plan to ensure it remains one of the best funded retirement programs in the country.
  • Investing $1.5 billion to significantly expand the FedEx Express Indianapolis hub over the next seven years. The Memphis SuperHub will also be modernized and enlarged in a major program the details of which will be announced later this spring.

FedEx believes the Tax Cuts and Jobs Act will likely increase GDP and investment in the United States-- Jan. 26 2018, FedEx press release

McDonald’s (25+ locations in Washington, D.C.) – Increased tuition investments which will provide educational program access for 400,000 U.S. employees. $2,500 per year (up from $700) for crew working 15 hours a week, $3,000 (up from $1,050) for managers, and more:

McDonald’s Corporation today announced it will allocate $150 million over five years to its global Archways to Opportunity education program. This investment will provide almost 400,000 U.S. restaurant employees with accessibility to the program as the company will also lower eligibility requirements from nine months to 90 days of employment and drop weekly shift minimums from 20 hours to 15 hours. Additionally, McDonald’s will also extend some education benefits to restaurant employees’ family members. These enhancements underscore McDonald’s and its independent franchisees’ commitment to providing jobs that fit around the lives of restaurant employees so they may pursue their education and career ambitions.

The Archways to Opportunity program provides eligible U.S. employees an opportunity to earn a high school diploma, receive upfront college tuition assistance, access free education advising services and learn English as a second language.  

“Our commitment to education reinforces our ongoing support of the people who play a crucial role in our journey to build a better McDonald’s,” said Steve Easterbrook, McDonald’s President and CEO. “By offering restaurant employees more opportunities to further their education and pursue their career aspirations, we are helping them find their full potential, whether that’s at McDonald’s or elsewhere.”

Accelerated by changes in the U.S. tax law, McDonald’s increased investment in the Archways to Opportunity Program includes:

    • Increased Tuition Investment:
      • Crew: Eligible crew will have access to $2,500/year, up from $700/year.
      • Managers: Eligible Managers will have access to $3,000/year, up from $1,050.
      • Participants have a choice for how they apply this funding – whether it be to a community college, four year university or trade school. There is no lifetime cap on tuition assistance – restaurant employees will be able to pursue their education and career passions at their own pace. The new tuition assistance is effective May 1, 2018 and retroactive to January 1, 2018.
    • Lowered Eligibility Requirements: Increase access to the program by lowering eligibility requirements from nine months to 90 days of employment. In addition, dropping from 20 hours minimum to 15 hours minimum (roughly two full time shifts) per week to enable restaurant employees more time to focus on studies.
    • Extended Services to Families: Extension of Career Online High School and College Advisory services to restaurant employees’ family members through existing educational partners Cengage and Council for Adult and Experiential Learning (CAEL).
    • Additional Resources: Career exploration resources for eligible restaurant employees to be available later this year.
    • Creation of an International Education Fund: Grants to provide local initiatives and incentives in global markets to further education advancement programs.
       

“Since its inception, Archways to Opportunity was meant to match the ambition and drive of restaurant crew with the means and network to help them find success on their own terms,” said David Fairhurst, McDonald’s Chief People Officer. “By tripling tuition assistance, adding education benefits for family members and lowering eligibility requirements to the equivalent of a summer job, we are sending a signal that if you come work at your local McDonald’s, we’ll invest in your future.”

After launching in the U.S. in 2015, Archways to Opportunity has increased access to education for over 24,000 people and awarded over $21 million in high school and college tuition assistance. Graduates have received college degrees in Business Administration, Human Resources, Communications, Accounting, Microbiology and more. – March 29, 2018 McDonald’s Corporation press release excerpt 

Wells Fargo (22 locations in Washington D.C.) - Raised base wage from $13.50 to $15.00 per hour; $400 million in charitable donations for 2018; $100 million increased capital investment over the next three years.

Note: If you know of other Washington D.C. examples, please email John Kartch at jkartch@atr.org 

The running nationwide list can be found at www.atr.org/list

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