House passage of pro-growth tax bill applauded

Industry associations cited the House of Representatives’ January 31st passage of the Tax Relief for American Families and Workers Act of 2024 (H.R. 7024) as a pro-growth step forward for business. Meant to provide additional tax relief and support to American families and workers, the bill also includes provisions that  offer business tax breaks that promise to “increase economic growth and bolster global competitiveness of equipment manufacturers of all sizes,” according to Kip Eideberg, senior vice president of Government and Industry Relations, Association of Equipment Manufacturers (AEM).

Rolls-Royce Power Systems’ mtu manufacturing facility in Aiken, S.C. (Photo: Rolls-Royce)

Relevant provisions within the bill include:

• restoration of businesses’ ability to fully and immediately expense domestic R&D expenditures, including salaries for researchers and scientists, replacing the current R&D five-year amortization schedule through the end of 2025;
• restoration of 100% bonus depreciation for qualifying property investments (equipment and other qualifying capital assets) made since the end of 2022 through the end of 2025;
• and loosening of interest expense limitation rules on business deductions for net interest expense, restoring a deduction cap of 30% on EBIDTA.

All provisions apply retroactivity to their expiration (2023 for bonus depreciation and 2022 for R&D and EBITDA) and sunset after 2025 along with most of the other policies from the Tax Cuts & Jobs Act, noted the Associated Equipment Distributors, an organization representing equipment dealers across industries and across North America.

The extension of the tax policies cited above are “vital to the long-term economic growth of the industry,” AEM sated in response to House passage of the bill. “Restoring immediate R&D expensing, full expensing for purchases of equipment, machinery and technology and a pro-business interest deduction will help equipment manufacturers invest in their communities, grow their businesses and hire more Americans,” Eideberg noted in a statement issued following the vote. 

AED President and CEO Brian P. McGuire commended members of the House Ways & Means Committee for their “leadership on both sides of the aisle for a significant victory for commonsense, pro-growth tax policies.” He went on to urge the Senate “to consider and pass H.R. 7024 immediately to provide certainty to equipment dealers, manufacturers and our customers.”

“Ensuring that our tax code supports our ability to create jobs in the United States and compete in the global economy is a national priority,” Eideberg added, “and we urge the U.S. Senate to finish the job by swiftly passing the bill and sending it to the President’s desk for signing.”