Formal Tax Legislation Process Law and Legal Definition
Formal tax legislation process is the process of proposing new tax legislation. The new tax bill originates from the House of Representatives and is sent to the Ways and Means Committee. Upon reaching an agreement, the committee members draft a proposed tax law. The bill is forwarded to the full House for debate, amendment, and approval. The senate reviews it and the Finance Committee rewrites the bill and receives final approval by the Senate. Then the bill goes to a joint committee of House and Senate members who try to compromise and cooperate with each other on a new version. After final approval by the House and the Senate, the bill goes to the President who may sign it, making it law, or veto it by not signing. If vetoed, the congress has the capacity to override it by a 2/3rd majority of each house.