The IRS protected public-private infrastructure partnerships from some of the 2017 tax reform's non-business friendly provisions. The new IRS guidance, Revenue Procedure 2018-59, shields heavily debt-financed P3s from restrictions by categorizing them as "real property trades or businesses." This will keep the cost of debt from increasing under the tax law change. This kind of protection is important for large infrastructure projects that are often dependent on debt in order to be financed. The lower cost of debt will also benefit investors, who will see increases in cash flows and returns on investments.

Of the IRS protections for P3s, Linda Schakel, Ballard Spahr Partner and former attorney adviser in the Treasury Department's Office of Tax Policy, noted, "This certainly shows the strong lobbying power of the infrastructure groups." The guidance allowing P3s to elect out of the restriction categorizes myriad activities ¬ such as designing, managing, or operating the public infrastructure ¬ as 'real property trade or businesses' as long as they're conducted as part of one of those P3 contracts.

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