This past week, ACA’s public policy team descended on Washington, D.C. for three days of advocacy and education. In conjunction with the Innovator Alliance, ACA conducted eight meetings on Capitol Hill, targeting influential members of the tax writing Ways and Means Committee. The meetings were in support of legislation led by Congressman David Kustoff (R-TN), the Small Business Investment Act of 2025. ACA is a strong supporter of this highly impactful bill to modernize Section 1202 which deals with making improvements to the tax treatment of qualified small business stock.
ACA CEO Pat Gouhin and ACA Chair Emeritus and Advisor on the Small Business Capital Formation Committee at the SEC, Marcia Dawood, championed innovation policies to Ways and Means Chair Jason Smith’s (R-MO) tax counsel and to the offices of Ways and Means Ranking Member Richie Neal (D-MA), Rep. Rudy Yakym (R-IN), Rep. Greg Murphy (R-NC), Rep. Aaron Bean (R-FL), Rep. David Schwiekert (R-AZ), Rep. Nathaniel Moran (R-TX) and Rep. Blake Moore (R-UT).
At each of these meetings, ACA stressed the importance of building support for Rep. Kustoff’s legislation, which will expand and enhance QSBS in three areas:
- Specifically, the legislation calls for a phased in holding period (3 years at 50%, 4 years at 75% and maintaining 100% for 5 years and beyond) to receive the exclusion for gain from QSBS.
- Allows convertible notes to be counted in the holding period.
- Expands entities beyond just a C Corp to be included in the holding period.
This bill will make it easier for small businesses to access the financing they need to grow by expanding QSBS or IRC Section 1202 eligibility to more businesses. This will make it easier and cheaper for businesses to raise capital and provide businesses more flexibility in their financing options. This bill will help properly incentivize both private investors to provide the needed capital and entrepreneurs to take calculated risks in launching new ventures.
In addition to meetings with Members of the House of Representatives, ACA co-hosted a roundtable discussion with Carta with Ways and Means, House Financial Services and House Small Business Committee staffers. This discussion, led by the deputy chief of staff to Rep. Ron Estes (R-KS) the lead of the Innovation Tax Team, enabled staffers to ask questions of ACA and of each other to further their education and understanding of issues important to the innovation and entrepreneurship ecosystem in the United States.
To wrap up the week in D.C., ACA met with Stacey Bowers, the Director of the Office of the Advocate for Small Business Capital Formation at the SEC. Director Bowers will be a keynote speaker at the upcoming ACA Summit on April 17, 2025, in Denver.
ACA’s public policy team continues to advocate on behalf of all ACA members in DC.
