Important Tax Legislation Introduced In U.S. House, Senate

As Connecting the Dots reported last week, at the beginning of 2022, a stricter limit on the deductibility of the interest payments on business loans went into effect, which increased the cost of financing critical investments in machinery and equipment.

Two senators have now introduced legislation to reverse this harmful change.

The bipartisan American Investment in Manufacturing (AIM) Act, introduced by Sen. Shelley Moore Capito (R-W.Va.) and Sen. Kyrsten Sinema (I-Ariz.), would reinstate the Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) measure for U.S. businesses, which would make it easier for capital intensive companies to raise capital or obtain financing, protect U.S. jobs and wages, and strengthen global competition.

Read more about the legislation here.

According to the National Association of Manufacturers (NAM), if enacted into law, the AIM Act would strengthen the industry’s ability to make critical investments in machinery and equipment while protecting more than 450,000 U.S. jobs. That is why NAM is now rallying the business community to urge Congress to act. Please click here to send a letter to your senators and members of Congress asking them to restore interest deductibility.

In related news: Reps. Ron Estes (R-Kansas) and John Larson (D-Conn.) have reintroduced the American Innovation and Research and Development (R&D) Competitiveness Act, which would permanently repeal a harmful R&D amortization provision that requires businesses to amortize, or deduct, their R&D expenses over a period of years. (Prior to 2022, businesses were allowed to immediately deduct 100 percent of their R&D expenses in the same year in which they were incurred.)

Click here to ask federal lawmakers to approve this bill.