NJBIA joined over 100 trade associations representing hundreds of thousands of businesses nationwide in urging federal lawmakers to remove a provision in the “Inflation Reduction Act” that would impose a 15% minimum tax on certain corporations, noting that it disproportionately falls on manufacturers.
The ability to recover the cost of acquiring an asset over a short time span, also called accelerated depreciation, has been part of the tax code for more than 60 years, the business and trade groups said in an Aug. 4 letter to U.S. senators. The inclusion in H.R. 5376 of a minimum tax on the financial statement income of certain businesses, a.k.a. a “book tax,” would remove the long-established tax code incentive to buy new machinery and invest in upgrades to U.S. manufacturing facilities.
“Economic analyses demonstrate the harmful impact of this provision,” the letter said. “The nonpartisan Joint Committee on Taxation found that nearly 50% of the burden of this tax would fall on manufacturers. The National Association of Manufacturers found that in 2023 alone this would result in 218,108 fewer jobs, reduce real GDP by $68.45 billion and decrease total wages by $17.11 billion.”
The letter urged the U.S. Senate to oppose the “book tax” in the final reconciliation legislation.
“It is clear that a book tax would threaten American competitiveness,” the letter stated.