Forvis Mazars recently participated in the Associated General Contractors of America (AGC) Financial Issues Forum (FIF), which is an interactive venue for contractors and advisors to collaborate on tax and other strategies specific to the construction industry.
Not only did the AGC present on the economy, but participants also heard from representatives from both the House Ways and Means Committee as well as the Senate Finance Committee. In addition, Forvis Mazars had the opportunity to provide the tax update for this event.
This article will offer some insights from the forum.
Economic Update
The relative strength of the construction industry varies depending on subsector and location. While data center construction is booming—with growth up 28% in April 2026 from April 2025—private nonresidential and other private office construction growth is down in the past year (-3.7% and -5.5%, respectively).1
Realistically, data center construction at the larger scale is generally limited to a few contractors. Even so, ancillary construction (things like roads, housing, and infrastructure) surrounding the data center does provide opportunities for a broader base of contractors of different sizes. The power subsector is also strong and growing, largely due to solar and battery storage (some of which is being deployed to support data center development).
From a labor perspective, job growth depends on location, with the big takeaway being the overall hiring environment is “low hire, low fire.”1
One of the largest challenges to the industry is material cost. Due to shipping price volatility because of the war in the Middle East, along with tariff implications, the costs for raw materials used in construction is uneven. Outside of tariffs, other policy has impacted the industry. The One Big Beautiful Bill Act (OB3) provided for (relative) certainty given the “permanent” nature of changes like bonus depreciation.
Policy Insights
Director of Coalitions and Member Services with the House Ways and Means Majority Allie Kotsovos and policy advisors from the Senate Finance Majority spoke about their respective committee priorities and answered questions from the FIF attendees. Two common focuses are on infrastructure and affordability. Topics discussed included extension of the gas excise tax and spending authority for the highway trust fund.
While there was an openness to exploring a bipartisan tax package, there was a sense of skepticism in relation to including technical corrections for OB3 provisions in any such package. The concern seemed to be that technical corrections would be viewed as relitigating the OB3, and that there is usually a partisan lens to such changes. Kotsovos mentioned that Ways and Means would be “more than happy to be ambitious” with a reconciliation bill but acknowledged that there is usually only one reconciliation bill passed in a year.
The AGC internally discussed topics that may be a priority for the organization moving forward. The topics discussed include:
- Focusing on labor, specifically on avenues for workforce development enabled by visa programs and other initiatives
- Education, including the support of trade schools
- IRS wait times
- Alternative minimum tax (AMT), given it is becoming more of a problem with small contractors
- Reintroduction of the Section 179D deduction
- Possible employer payroll tax credit equal to wages for apprenticeship
- Research and development credit, given an observation that recent cases seem to be less taxpayer friendly
Proposed tax policy was also discussed, including the potential for a year-end bipartisan tax bill, “Reconciliation 3.0,” and housing bills focusing on affordability. Lastly, given the prevalence of data center construction, there were conversations regarding possible tax planning strategies related to this development, whether it be clean energy credits or opportunity zones.
Tariff Update
Tariffs were the primary topic of conversation for this portion of the event. Although many contractors are not the importer of record, some are. Importers should consider whether they will “pass on” the refund to their customers, and customers may inquire for refunds from their vendors.
Either way, the parties may decide to go through an exercise to understand what the tariff “trickle down” impact was to the customer. While many importers increased the price of their goods because of tariffs, the increase may not have been a “one-to-one” impact with additional factors like oil price fluctuations and inflation playing a part as well.
How Forvis Mazars Can Help
Reach out to your trusted advisor at Forvis Mazars to consider how these updates may impact your tax planning and other strategies. Our professionals provide a commitment to Unmatched Client Experience® through our suite of tax compliance and consulting services. Contact us to learn more.
- 1“U.S. Construction Outlook: What’s in the Mix for the Rest of ’26 (and Beyond)?” The Associated General Contractors of America, Inc., Simonson, Ken, June 2026.