Tax bills for most small construction companies would fall under a broad tax-reform outline unveiled on Sept. 27 by the Trump administration and congressional Republicans.

The proposal calls for cutting the corporate tax rate to 20% from 35%. Perhaps most important for small construction firms, the tax rate for pass-through businesses would be limited to 25%. Pass-through entities, such as sole proprietorships, partnerships and S-corporations, are taxed at individual, not corporate, rates, which hurts many construction companies in those categories.

Historically, construction has faced the highest effective tax burden of any industry, according to an earlier analysis by the U.S. Treasury Dept.

“By lowering the pass-through rate, the plan will reduce the tax bill of thousands of small businesses and help to spur job and economic growth,” Granger MacDonald, chairman of the National Association of Home Builders, said in a statement.

The Associated Builders and Contractors also lauded the GOP-drafted framework. “The equivalent rate reduction envisioned in the framework for businesses on both sides of the code, paired with a broader tax base, moves toward ABC’s vision of fair treatment for all companies, regardless of size, structure or sector,” says ABC President and CEO Michael D. Bellaman.

There is much work ahead on Capitol Hill, however, Bellaman and others cautioned. The framework that was released is only nine pages long. Fleshing it out into a detailed bill is likely to take weeks, if not longer.

“This is the beginning of what is going to be a complex process,” says Dave Bauer, American Road & Transportation Builders Association senior vice president. Bauer says he expects the final bill will have several changes.

“There’s a lot of unanswered questions here,” says Steve Hall, American Council of Engineering Companies vice president of government affairs. “And that list gets longer the more we look and think about it.”

Bellaman says ABC doesn’t expect the package to be perfectly tailored for the construction industry. “We realize that there are going to be some things we wouldn’t prefer, but we are looking at it holistically,” he says. “We want to put more dollars in the pockets of our businesses and workforce.”

Bellaman says his group will work with Congress to add tweaks to benefit the construction industry, such as allowing 529 college funds for trade education; granting flexibility, so contractors can pay taxes after a job is complete; and providing incentives for companies to help retrain workers. “The framework, we think, is a great first step,” he says.

In addition, the proposal would allow companies to expense all capital expenses for five years, a provision that Bauer says ARTBA supports.

While the proposal may be a work in progress, at least it is progress, many observers note. “It’s a step in an evolution process, and there’s going to be more steps in this process,” says Hall. “But if it means that the ball is now in Congress’s court to start to fill these details in and to try to assemble a package that can pass the House and pass in the Senate, that’s a good thing. We want this process to move forward.”