NAIOP and a coalition of national real estate organizations on Monday sent a letter to Congress opposing any move to cap or eliminate the ability of a business to deduct its state and local property taxes from their federal income tax. Tax writers on the House Ways and Means Committee are considering the option in order to stay within the cost and spending limits of the recently passed House budget resolution. The negative impact on real estate businesses if the policy is adopted would be severe.

State and local property taxes represent an estimated 40% of the operating expenses of U.S. commercial real estate businesses. Eliminating or capping the deduction for such business expenses would drive up the costs of real estate, reduce investment in new development, and lower the values of existing commercial properties. NAIOP and its real estate partners will continue to encourage our elected officials to oppose limitations on the deductibility of business expenses and oppose inclusion of such provisions in tax legislation.