The U.S. House of Representatives passed a sweeping tax package on Jan. 31 that will provide much-needed relief to businesses by restoring several critical deductions.
The Tax Relief for American Families and Workers Act received overwhelming bipartisan support, with 357 representatives voting in favor of the bill. It will now go before the Senate for further consideration. The legislation includes several provisions intended to reduce the tax burden on businesses, including:
- Restoring immediate research and development expensing for domestic research
- Reinstating full expensing for businesses’ capital investments
- Interest deductibility for businesses forced to borrow at high interest rates
- Expanding the amount of investment a small business can immediately write off from $1 million to $1.29 million.
The bill has received strong support from business and trade groups. “Manufacturers thank [House Speaker Mike Johnson (R-LA)] and [House Ways and Means Committee Chairman Jason Smith (R-MO)] for their leadership in passing the Tax Relief for American Families and Workers Act — and the bipartisan work in the House and Senate to secure progress for America’s manufacturing workers,” said Jay Timmons, president and CEO of the National Association of Manufacturers. “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.”
The U.S. Chamber of Commerce is similarly pushing the Senate to quickly move forward on the bill. “Businesses need certainty to make decisions,” said Neil Bradley, executive vice president and chief policy officer for the U.S. Chamber. “Restoring and extending the deduction for domestic research and development (R&D) expenses; 100 percent bonus depreciation; and the earnings before interest, taxes, depreciation, and amortization (EBITDA) standard for deducting business interest expenses will give businesses the ability to plan, invest, and grow.
“As tax filing season kicks off, we are glad to see the House come together in a bipartisan way to pass this legislation to support and bring much-needed tax certainty to U.S. businesses,” Bradley continued. “Now, the Senate must move swiftly to consider this legislation and send it to the President’s desk to be signed into law.”