Saving Our Mainstreet American Locations for Leisure and Shopping Act of 2025; Saving Our MALLS Act
Summary
H.R. 4115, the Saving Our Mainstreet American Locations for Leisure and Shopping Act of 2025, or the Saving Our MALLS Act, proposes an amendment to the Internal Revenue Code of 1986. The amendment aims to exclude certain discharges of indebtedness secured by real property from being counted as income. This exclusion applies specifically to qualified commercial or retail indebtedness incurred before March 1, 2023, and discharged between December 31, 2023, and January 1, 2028.
Expected Effects
If enacted, this bill would provide tax relief to businesses, particularly those in the retail and commercial sectors, by excluding certain debt discharges from their taxable income. This could incentivize investment and help businesses recover from financial difficulties. The bill modifies Section 108 of the Internal Revenue Code to include 'qualified commercial or retail indebtedness' in the list of exclusions.
Potential Benefits
- Tax Relief for Businesses: Businesses facing debt discharge related to commercial or retail properties could see a reduction in their tax burden.
- Investment Incentive: The exclusion may encourage businesses to invest in their properties and operations, fostering economic activity.
- Financial Recovery: Businesses struggling with debt may find it easier to recover financially, potentially preventing closures and job losses.
- Support for Retail Sector: The bill specifically targets the retail sector, which has faced challenges in recent years, providing targeted assistance.
- Simplification of Tax Code: By clarifying the treatment of debt discharge in specific scenarios, the bill could simplify tax compliance for affected businesses.
Potential Disadvantages
- Potential Revenue Loss: Excluding certain debt discharges from income could reduce government tax revenue.
- Complexity in Definition: The definition of 'qualified commercial or retail indebtedness' may lead to interpretation issues and potential loopholes.
- Limited Scope: The bill's focus on specific types of debt and properties may exclude other businesses facing financial difficulties.
- Temporal Restriction: The discharge must occur within a specific period, potentially excluding businesses with debt discharged outside this timeframe.
- Potential for Abuse: There is a risk that businesses may attempt to structure transactions to take advantage of the exclusion inappropriately.
Most Disadvantaged Areas:
Constitutional Alignment
The bill falls under the purview of Congress's power to lay and collect taxes, duties, imposts, and excises, as outlined in Article I, Section 8, Clause 1 of the Constitution. The bill aims to promote the general welfare by providing tax relief to specific sectors of the economy. The Constitution grants Congress broad authority over taxation, and this bill appears to be within that authority.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).