Most contractors won’t pay more in taxes under President Joe Biden’s $2.3 trillion infrastructure proposal, while the infusion of cash to fund more public construction projects would provide a significant upside for their businesses, according to a certified public accountant who leads Ernst & Young’s global construction and engineering practice. According to the U.S. Census Bureau, just 16% of nonresidential construction businesses in the U.S. are registered as C corporations, and thus subject to corporate tax rates. The lion’s share of the remaining 84% is comprised of S corporations, sole proprietorships and partnerships that are treated as pass-through entities, where their owners pay taxes on their profits at the individual rate. Given the possibility of minor tax impacts on the majority of contractors and the potentially outsized gains in revenue from stimulus spending, Roberts said the construction clients he works with have an increasingly positive view of the proposal.
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