In Washington – ACMA Insider – February 9, 2024

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House Passes R&D Expensing Bill, Senate Timeline Uncertain

The House last week passed 357-70 the bipartisan Tax Relief for American Families and Workers Act, which included the restoration of immediate R&D expensing for domestic research and innovation activities through 2025. ACMA has lobbied for passage of this restoration for two years, including strongly supporting the legislation passed last week.

This provision is broadly used by manufacturers across the country, but is particularly important for small and medium-sized manufacturers looking to expand their businesses and grow. In a recent National Association of Manufacturers survey, 89 percent of respondents said higher tax burdens on manufacturing makes it more difficult to hire staff, buy new equipment and expand facilities.

In addition to R&D expensing, the bill also reinstates full expensing, sometimes called 100% accelerated depreciation, for business capital investments and changes to the interest deductibility standard, as well as a number of changes to income tax law.

The bill now moves to the Senate, where it enjoys bipartisan support. The issue for Senate consideration will be timing, with multiple other bills also in line for consideration. It is unlikely this bill can be passed in time to impact the April tax season.

Contact Dan Neumann with any questions.