The U.S. House of Representatives passed a bipartisan tax package on Wednesday night that would restore several business tax incentives vital to small and mid-size manufacturers who have experienced significant tax increases due to the recent expiration of these pro-growth incentives.
The $78 billion Tax Relief for American Families and Workers Act passed 357-70 with 188 Democrats and 169 Republicans voting in favor. The legislation, which would also temporarily expand the child tax credit, now moves to the Senate for final consideration.
The National Association of Manufacturers said the passage of the legislation is a “major victory” for manufacturers because of three provisions that are critical to the industry. The bill would:
- Restore immediate R&D expensing for domestic research
- Reinstate full expensing (also known as 100% accelerated depreciation) for businesses’ capital investments
- Return the U.S. to a pro-growth interest deductibility standard
“Manufacturers are now counting on the Senate to act quickly to restore these provisions that are absolutely critical to strengthening America’s competitiveness and growth of manufacturing in America,” NAM President and CEO Jay Timmons in a social post Wednesday night.
The overwhelming majority (89%) of respondents to the NAM’s Q4 2023 Manufacturers’ Outlook Survey said higher tax burdens on manufacturing make it more difficult for them to hire, buy new equipment and expand their facilities.
Courtney Silver, the president and owner of the precision machining company Ketchie Inc. and the chair of NAM’s Small and Medium Manufacturers Group, said restoring the tax incentives is critical.
“When key tax provisions expired, it wasn’t just businesses like Ketchie that felt the pinch—it was our ability to support and create jobs that took a hit,” Silver said. “This isn’t just about numbers on financial statements; it’s about taking care of people who make things in America and work at small manufacturing companies across our country.”