November 6, 2023

MSCI, National Association Of Manufacturers Ask U.S. Lawmakers To Extend Tax Policies

The Metals Service Center Institute (MSCI) joined the National Association of Manufacturers (NAM) and more than 1,300 other organizations in sending a letter to leaders in the U.S. House and Senate asking them to schedule votes on legislation that would extend certain tax provisions that are important to manufacturers and metals industry companies.

Specifically, the letter, available here, called on Congress to:

  • Ensure the tax code supports innovation by allowing for immediate research and development (R&D) expensing. The private sector accounts for more than 75 percent of total R&D spending, with small businesses alone accounting for approximately $90 billion in all private sector R&D investments. With wages and salaries comprising approximately 75 percent of R&D spending, allowing R&D amortization is, first and foremost, a jobs issue.
  • Enabling businesses to finance growth by setting a pro-growth interest deductibility standard.Before January 1, 2022, businesses’ interest expense deductions were limited by section 163(j) to 30 percent of their earnings before interest, tax, depreciation, and amortization. Interest deductions are now limited to 30 percent of earnings before interest and tax. By excluding depreciation and amortization, the stricter standard acts as a tax on investment, making it more expensive for capital-intensive companies throughout the supply chain to finance job-creating growth.
  • Making permanent a key incentive for capital equipment purchases. From 2017 through 2022, the federal tax code allowed for a 100 percent deduction for the purchase of equipment and machinery in the tax year purchased. That provision began to phase out this year and will completely disappear by 2027. Congress enacted full expensing to spur investments and ensure that the United States is well-positioned to attract capital in a competitive global marketplace. It must reverse the phaseout and restore the 100 percent deduction.

MSCI urges its member company employees and leaders to make their voices heard on these important tax issues. NAM has launched online action centers where you can learn more about individual tax policies and send letters to lawmakers asking them to reduce the tax burden on manufacturing companies. Click here to learn more about the R&D tax credit, here for interest deductibility, and here for full expensing.

In related news: the manufacturing and metals industries also oppose an Internal Revenue Service proposal that would change the form for the R&D credit. The IRS is seeking to require a significant amount of detailed quantitative and qualitative information at each business component level, including information that may be proprietary or subject to nondisclosure warning. These changes would impose an undue compliance burden, threatening taxpayers’ ability to claim the R&D tax credit legitimately. Read more here.

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