IECA Asks U.S. Congress to Renew Tax Incentives
Last month, the Industrial Energy Consumers of America (IECA) – an organization that advocates on behalf of U.S. manufacturers – sent a letter to the U.S. Congress, asking legislators to renew tax provisions that expired nearly a year ago, at the end of 2014.
The letter was signed by 218 IECA members – among them a sampling of top brands, including ABB, Allegheny Technology, Applied Materials, AT&T, Caterpillar, Chevron, Deere & Company, FedEx, Goodyear Tire & Rubber, Harley-Davidson, Lockheed Martin, National Grid, Owens-Illinois, Qualtek Manufacturing, Verizon, and Volvo.
The two provisions that the group would like to see reinstated are:
- Section 179 of the IRS Tax Code, which allows a business to deduct, for the current tax year, the full purchase price of financed or leased equipment and off-the-shelf software that qualifies for the deduction. The equipment purchased, financed, or leased must be within the specified dollar limits of Section 179, and the equipment must be placed into service in the same tax year that the deduction is being taken (for example, the equipment must be put into service between January 1 and December 31 of the year the deduction is to be taken.)
- Accelerated expensing, which, according to the National Taxpayers Union (NTU), “gives businesses the certainty they need to spend money on capital expenditures in an uncertain economic environment.” The NTU points to a recent study out of Harvard and the University of Chicago, which found that 50 percent expensing raises investment appreciably; sometimes up to 30 percent over a given time period.
“We support legislation in both the House and Senate to revive and extend critical pro-growth, pro-jobs, pro-investment tax incentives that are currently expired,” said the IECA correspondence. “Acting to renew these provisions—including enhanced Section 179 expensing, 50 percent expensing and the provisions allowing for the accelerated use of Alternative Minimum Tax credits in lieu of bonus depreciation—will spur much-needed economic growth.”
The group noted that, in the absence of such incentives, American businesses were becoming increasingly conservative about making capital investments that would drive the economy, and the energy industry, in particular.
“Renewing these provisions will provide an immediate incentive for businesses to make additional capital investments, boosting economic growth and job creation,” the organization said.
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