House Passes Bipartisan Tax Relief for Manufacturers

A Critical Win for the Industry

In a significant victory for manufacturers, the House of Representatives recently passed a bipartisan tax package, marking a crucial step toward supporting the industry’s growth and global competitiveness. The Tax Relief for American Families and Workers Act, approved with a resounding vote of 357–70, includes provisions that address key priorities for U.S. manufacturers.

Key Provisions

The following are manufacturing priorities included in the bill:

  1. Restoring immediate R&D expensing for domestic research
  2. Reinstating full expensing (100% accelerated depreciation) for businesses’ capital investments
  3. Returning the U.S. to a pro-growth interest deductibility standard

Significance for Manufacturers

The passage of this measure holds immense importance for manufacturers, empowering them to invest in their businesses, create jobs, and enhance their global competitiveness. Particularly beneficial for small and medium-sized manufacturers, these provisions aim to alleviate the impact of significant tax increases resulting from the expiration of these pro-growth measures. Many small businesses found it challenging to allocate resources to research and development due to the escalating costs. This shift of R&D being rewarded to a cost has burdened small businesses, making it difficult for them to afford the expense. According to the NAM’s Q4 2023 Manufacturers’ Outlook Survey, an overwhelming 89% of respondents expressed concerns that higher tax burdens on manufacturing would hinder their ability to hire, invest in new equipment, and expand facilities.

A Testament to Collaboration

Now that this critical legislation has passed through the House and as the industry awaits the Senate’s decision, manufacturers, including small businesses, anticipate the restoration of these tax provisions. The impact extends beyond financial statements, reaching the lives of individuals and communities across the nation. The bipartisan Tax Relief for American Families and Workers Act stands as a testament to the collaborative efforts aimed at fostering a pro-growth environment for domestic manufacturing.

THE Manufacturing Resource

With the bill successfully passing in the House, the focus now shifts to the Senate. The critical importance of the Senate’s swift action to ensure the restoration of these provisions is essential for strengthening America’s competitiveness and fostering manufacturing growth, both domestically and abroad. As manufacturers celebrate this small victory, it’s important to know they can still count on their local MEPs. The NJMEP team brings decades-worth of experience to the regulatory landscape in New Jersey, and our no-cost assessment is here for your manufacturing business to help uncover hidden value within your facility. In the meantime, it’s important to keep abreast of any updates and monitor the impact this new legislation will have on your business, your operations, and your customers.

Interested in learning more about these Tax Credits? Connect with an expert, today!

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