AMBA Urges Swift Passage of Tax Bill Critical to Mold Builders
The moldmaking industry is called to action to ensure the House and Senate take up the Tax Relief for American Families and Workers Act of 2024, critical for U.S. manufacturers to grow and maintain their businesses.
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The American Mold Builders Association (AMBA) announces that the bipartisan Tax Relief for American Families and Workers Act of 2024, crafted by Senate Finance Committee Chairman Ron Wyden and House Ways and Means Committee Chairman Jason Smith, overwhelmingly passed on Jan. 19, by a vote of 40-3. Now, the AMBA is urging mold builders to act and contact Washington to tell the House and Senate to take up the bipartisan tax bill when they return to Washington, D.C., next week, as it could save companies hundreds of thousands of dollars each year.
The AMBA is working on a bill that removes the requirement to capitalize and amortize R&D activities over five years, and restores the ability to deduct R&D expenses retroactive to Jan. 1, 2022. The pending legislation, also retroactive to Jan. 1, 2023, reinstates 100% bonus depreciation expensing — which fell to 60% on Jan. 1 — and the full EBITDA standards for 163(j) deductions of business loan interest. In addition, the bill will raise the current Section 179 Small Business Expensing threshold from $1.16 million to $1.29 million.
The inclusion of the immediate deduction of R&D expenses, Bonus Depreciation, restoring Section 163(j) and the increase to the Section 179 deduction will help to ease the tax burden on U.S. job creators, enabling them to invest in and continue to grow their businesses.
“AMBA thanks Chairmen Wyden and Smith for their leadership in moving legislation with critical tax provisions for small- and medium-sized manufacturers,” Kym Conis, managing director with the AMBA, says. “The loss of full expensing and the requirement to amortize R&D expenses have caused surprise tax bills for small- and medium-sized manufacturers, which many struggle to cover. Restoring the immediate deduction for R&D expenses will help ensure that manufacturers can continue to utilize this vital tax provision critical to competitiveness, innovation and U.S. jobs.”
In a March 2023 survey, 77% of AMBA members reported conducting R&D activities in 2022, with the average dollar amount being $1.446 million for each company. Members report that the average increase in tax liability in 2022 for AMBA members, due to having to pay tax on R&D as an asset and amortization of expenses, is $290,013. These are essential small businesses, averaging 56 employees as of April 1, 2023, according to the survey, placing an outsized impact of this tax hike on the shoulders of downstream manufacturers.
To help manufacturers in the U.S. continue to invest in and grow their businesses, AMBA supports the immediate passage of the Tax Relief for American Families and Workers Act of 2024. Manufacturers in the U.S. rely on these critical provisions to help invest in their facilities and employees, and improve their global competitiveness.
