Saving Our MALLS Act
- Bill Number
- H.R. 4115
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-06-24: Referred to the House Committee on Ways and Means.
- Last Updated
- 2025-07-17T18:58:11Z
AI-Generated Summary
Purpose
The "Saving Our MALLS Act" of 2025 aims to provide tax relief to owners of commercial and retail real estate properties by excluding certain forgiven debts from taxable income. This is intended to support the recovery and restructuring of struggling retail and leisure spaces, such as shopping malls, amid economic challenges.
Key Provisions
- New Tax Exclusion: Adds a provision to Section 108(a)(1) of the Internal Revenue Code (IRC) excluding "qualified commercial or retail indebtedness" from gross income when forgiven.
- Definition of Qualified Indebtedness:
- Debt must have been incurred or assumed by the taxpayer before March 1, 2023.
- Forgiveness must occur between December 31, 2023, and January 1, 2028.
- The debt must be secured by "specified real property" at all times from incurrence to forgiveness.
- Definition of Specified Real Property:
- Real estate used in the taxpayer's trade or business.
- Excludes residential rental property (under IRC Section 168(b)(3)(B)) and certain tax-exempt facilities like airports or docks (under IRC Section 144(c)(6)(B)).
- Coordination with Other Rules: Updates related IRC sections to integrate this exclusion with existing ones (e.g., for qualified farm indebtedness or real property business debt), ensuring it reduces tax attributes like net operating losses or basis in assets proportionally.
- Effective Date: Applies to debt discharges on or after December 31, 2023.
Significant Changes to Existing Law
- Expands IRC Section 108, which generally treats forgiven debt as taxable income (a "discharge of indebtedness" event), by adding a temporary exclusion specifically for commercial and retail real property debt.
- Mirrors past temporary relief (e.g., for residential mortgages during the 2008 financial crisis) but targets non-residential properties, with a defined time window and stricter security requirements.
- Amends coordination rules in Sections 108(a)(2) and 108(b) to treat this new exclusion similarly to others, preventing double benefits while allowing attribute reductions to offset lost tax revenue.
Potential Impacts
- On Businesses and Citizens: Provides financial relief to commercial real estate owners (e.g., mall operators) by avoiding tax on forgiven loans, potentially enabling more debt restructurings, property renovations, and job preservation in retail sectors. Could indirectly benefit consumers through sustained local shopping options.
- On Government Agencies: The IRS will see reduced tax collections during the exclusion period, potentially leading to lower federal revenue (estimated impacts would depend on usage). No direct effects on other agencies.
- On International Relations: None apparent, as this is a domestic tax policy focused on U.S. real property.
Main Stakeholders Affected
- Commercial and Retail Property Owners: Primary beneficiaries, including mall developers, shopping center operators, and businesses with secured real estate debt.
- Lenders and Financial Institutions: May facilitate more loan workouts or foreclosures with tax incentives for borrowers, affecting their risk assessments.
- Taxpayers and the IRS: Broader taxpayers could face indirect revenue shifts; the IRS handles implementation and enforcement.
- Retail and Leisure Industries: Employees, suppliers, and communities reliant on vibrant commercial spaces.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens tax equity for commercial sectors similar to residential relief laws, but the temporary nature (ending in 2028) limits long-term precedent. Requires clear documentation of debt security to avoid disputes in tax audits.
- Constitutional: No evident challenges, as it falls under Congress's taxing and spending powers (Article I, Section 8).
- Political: Represents bipartisan support (introduced by members from both parties) for post-pandemic economic recovery in vulnerable retail areas, potentially influencing future targeted tax relief debates without broader reform.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Tenney, Claudia [R-NY-24]
Cosponsors (3)
Rep. Tonko, Paul [D-NY-20], Rep. Lawler, Michael [R-NY-17], Rep. Ryan, Patrick [D-NY-18]
Recent Actions
- 2025-06-24: Referred to the House Committee on Ways and Means.
- 2025-06-24: Introduced in House
- 2025-06-24: Introduced in House
Bill Versions
- Saving Our Mainstreet American Locations for Leisure and Shopping Act of 2025 — issued 2025-06-24 — PDF (4 pages)