Early Saturday morning, the U.S. Senate voted 51-49 to pass a wide-ranging tax reform bill, following passage of similar legislation by the U.S. House of Representatives in November.

While the bills are similar, they also contain major differences which must now be reconciled before President Trump can sign any tax reform legislation. The next step in the legislative process is the conference committee, in which a small group of members from both the House and Senate attempt to reconcile the differences in the bills to forge a compromise each chamber will vote on again.

The House of Representatives voted to go to conference on Monday night and appointed their conferees that same night. Republicans named Ways and Means Chairman Kevin Brady (R-Texas), Reps. Devin Nunes (R-California), Peter Roskam (R-Illinois), Diane Black (R-Tennessee), Kristi Noem (R-South Dakota), Rob Bishop (R-Utah), Don Young (R-Alaska), Greg Walden (R-Oregon) and John Shimkus (R-Illinois) as conferees. Democrats named Ways and Means Ranking Member Richard Neal (D-Massachusetts), Reps. Sandy Levin (D-Michigan), Lloyd Doggett (D-Texas), Kathy Castor (D-Florida) and Raúl Grijalva (D-Arizona) as conferees.

The Senate voted to go to conference on Wednesday, when Republicans named their conferees, including Sens. Orin Hatch (R-Utah), Mike Enzi (R-Wyoming), Lisa Murkowski (R-Alaska), John Cornyn (R-Texas), John Thune (R-South Dakota), Rob Portman (R-Ohio), Tim Scott (R-South Carolina), and Pat Toomey (R-Pennsylvania). Democrats have named Sens. Ron Wyden (D-Oregon), Bernie Sanders (I-Vermont), Patty Murray (D-Washington), Maria Cantwell (D-Washington), Debbie Stabenow (D-Michigan), Bob Menendez (D-New Jersey) and Tom Carper (D-Delaware) as their conferees.

Republican leadership hopes to enact a final tax bill over the next two weeks.

One of the major differences between the Senate and House bills is how each bill addresses taxation of pass-through businesses. The House and Senate proposals impose 25% and 20% tax rates on insurance agencies organized as C corps, respectively. However, both bills would continue to tax pass-through services businesses at individual rates, with differing rates for some small businesses, using complicated formulas. Members can log in to the Big “I” government affairs taxes webpage for more details.

After Sens. Ron Johnson (R-Wisconsin) and Steve Daines (R-Montana) garnered additional last-minute concessions for small businesses organized as pass-throughs, the Senate bill ultimately contains a more favorable rate for many Big “I” members. Throughout the process, the Big “I” has led a coalition of insurance industry organizations in sending letters to the House and Senate to express concerns about the bill’s treatment of some small businesses. The Big “I” will continue to advocate on pass-through taxation as the bills head to conference committee.

In addition to concerns about the direct impact of tax reform on Big “I” members, the Senate legislation originally included a provision to subject royalty income derived from the licensing of a tax-exempt organization’s name or logo to the unrelated business income tax. In a major win for the Big “I” and its state associations, the Senate removed the provision late Friday before the bill passed. Such a tax would have left the Big “I” and its state associations with a significant new financial burden that could have reduced services to member agencies. Royalties have historically not been subjected to corporate tax rates.

In response to this provision, the Big “I” has been working closely with the American Society of Association Executives and a select group of other trade associations. The Big “I” and multiple state associations also sent letters to key Senate offices. The Big “I” is hopeful that removal of the provision from the Senate bill and its absence in the House bill mean that it will not be included in any potential final tax bill, but the government affairs team will continue to work on this issue as the conference committee begins its work.

For more information on Big “I” advocacy efforts, the status of tax reform and the potential impacts of reform on Big “I” members, log in to the Big “I” government affairs taxes webpage.

Wyatt Stewart is Big “I” senior director of federal government affairs.