U.S. manufacturers urge Congress to advance sector tax priorities

Congress on Tuesday reached a crucial milestone in the restoration of three key tax priorities for manufacturers. This bipartisan achievement, long pursued by the National Association of Manufacturers (NAM), was unveiled by prominent congressional leaders.

The $78 billion Tax Relief for American Families and Workers Act was a compromise between House Ways and Means Committee Chairman Jason Smith (R-MO) and Senate Finance Committee Chairman Ron Wyden (D-OR). It marks the reinstatement of immediate Research and Development (R&D) expensing, a return to a pro-growth interest deductibility standard, and the revival of full expensing, also known as 100% accelerated depreciation, for businesses’ capital investments.

Additionally, the proposed framework incorporates provisions for disaster tax relief and allocates $33 billion to partially extend the child tax credit expansion initiated in 2021.

It’s essential to note that for almost seven decades, the tax code permitted businesses to immediately deduct R&D costs. However, a shift occurred in 2022, forcing companies to amortize these costs over multiple years. 

The same year witnessed the implementation of a more stringent interest limitation, acting as a tax on investment. Furthermore, the phase-down of full expensing began last year. This bipartisan agreement seeks to address and rectify these alterations, aligning with manufacturers’ interests and fostering a more favorable tax environment.

The National Association of Manufacturers has led a coalition of business associations on a  letter urging Congress to vote on and pass the bill. The Arizona Manufacturers Council, NAM’s Arizona state affiliate, is a signer on the letter. 

“Manufacturers want a predictable business environment, and that includes a stable tax code,” AMC Executive Director Grace Appelbe said. “Manufacturing in Arizona is thriving in part thanks to our competitive tax environment. That, combined with a strong federal tax code, positions Arizona for even greater manufacturing success.” 

The letter emphasizes the need for this bill to be voted on in a timely manner. Insisting that Congress should listen to the voices of industry leaders. 
The NAM has been essential in the deal, having made the business case for the tax provisions’ reinstatement to lawmakers, including via an ad campaign, “Keep America Resilient.”

Add comment

Subscribe to the Dry Heat

Get updates on the most important news delivered right to your email. Fully personalized options. No SPAM. Unsubscribe anytime.

Sign Me Up!

Let’s Get Social

Chamber Business News wants to connect with you. Follow us, tweet, share, post, comment... however you get social is the perfect way to connect.