The House Ways and Means Committee (the tax-writing committee of the U.S. House of Representatives) is slated to meet over the next few weeks to consider various provisions to include in a tax reconciliation bill.

According to reliable sources on Capitol Hill, one proposal being given serious consideration would eliminate the ability businesses have to deduct state and local property taxes from their federal tax returns. Early estimates suggest that eliminating this deduction—being referred to in Washington as “Business SALT” or “B SALT”—would generate $400 billion in additional revenue for the federal government over the next 10 years and would be used to offset other provisions in the tax bill.

According to data published by the National Council of Real Estate Investment Fiduciaries (NCREIF), state and local property taxes represent 40% of the operating costs of U.S. commercial real estate. Clearly, for most real estate businesses, this would be a significant tax increase, possibly with a devastating impact to a firm’s business model or REIT status.

Historically in Congressional negotiations involving tax legislation, if a proposal such as this one is included in the draft legislation, it is very difficult to remove later in the legislative process. For this reason, CRE executives may want to reach out to their members of Congress and urge them to preserve the full deductibility of business-related property taxes and oppose any effort to affect the deductibility of the Business SALT.