June 3, 2023

Washington Wire: Urge Congress to Act on Critical Tax Provisions

11/07/2022

 

Action Alert: Urge Congress to Act on Critical Tax Provisions
 
One Voice is lobbying Congress to pass a tax extenders bill that reinstates immediate expensing for the Research and Development Tax Credit; prevents 100% Bonus Depreciation from sliding to 80% on January 1, 2023; and reverts to allowing small businesses to fully use 30% EBITDA 163(j) interest deduction. Any one of these provisions saves thousands of dollars each year for NTMA and PMA members, and taken together, can mean hundreds of thousands and millions to the bottom line. If you use any of these and want to prevent further tax increases, you need to act now and send a letter to your Senators and Representatives calling on them to pass a tax extenders bill this year.
 
Congress is returning from the elections in a few weeks and with only days left to finalize legislative business, including for manufacturers. As Congress looks to complete their work for this year, they will likely negotiate a year-end tax bill to potentially extend, enhance, or make permanent certain tax provisions that spur investment. The tax extenders package represents an opportunity to make needed changes to tax provisions critical to manufacturers, such as the R&D tax credit, Bonus Depreciation, and Section 163(j). 
 
Your voice matters and Congress needs to hear from you on the negative consequences of raising taxes on U.S. manufacturers. Contact your member of Congress TODAY and urge them to support American manufacturers by taking action on a tax extenders package that includes the R&D tax credit, Bonus Depreciation, and Section 163(j). Click here and make your voice heard!

 

 
  
USTR Seeks Comments on Section 301 Tariffs
 
The Office of the U.S. Trade Representative (USTR) has issued a questionnaire to guide stakeholder comments on the effectiveness of the 25 percent and 7.5 percent Section 301 tariffs on more than 10,000 imported goods from China, as part of the statutorily required four-year review. 
 
USTR is asking the public to comment on whether the tariffs, imposed under Section 301 of the Trade Act of 1974, were effective in addressing three of the four findings USTR made as part of its initial investigation. That investigation, which concluded in 2018, found that China uses foreign ownership restrictions and similar measures to pressure U.S. companies to transfer technology; directs Chinese companies to systemically acquire U.S. companies and assets to obtain cutting-edge U.S. technology; and steals sensitive commercial information and trade secrets from U.S. companies. 
 
The questionnaire includes three sections of questions examining the impacts of the tariffs at the economy-wide level, the sector/industry level, and the specific tariff heading level. 
 
The economy-wide section directs stakeholders to share views on whether the tariffs caused China to eliminate any of its discriminatory policies, what changes China has made to those policies, and whether the tariffs counteracted China's policies. Stakeholders are also asked how the tariffs could be more effective, their impact on the U.S. economy, and what alternative policy options USTR should consider.
 
The sector-specific section asks for comments on whether the tariffs were effective in eliminating discriminatory Chinese practices in specific industries. It also asks stakeholders for a detailed analysis of the impacts that policy options other than tariffs might have on U.S. employment, wages, domestic manufacturing, capital investment, supply chain shifts and resiliency, and consumer goods.
 
Concerning specific tariff subheadings covered by the Section 301 action, the questionnaire asks whether USTR should maintain, eliminate, or change those tariffs. It asks whether tariffs on specific goods have impacted domestic manufacturing, U.S. employment and wages, small businesses, inventory practices for products or downstream products, and supply chain shifts. Stakeholders also can identify goods not subject to the Section 301 tariffs that, in their opinion, should be. 
 
The USTR’s comment portal opens on November 15, 2022 and closes January 17, 2023.

 

 

 
Treasury and IRS Seek Comments on Energy Tax Incentives
 
The U.S. Department of Treasury and Internal Revenue Service (IRS) have published additional notices requesting public comments as they work toward implementing the clean energy and climate tax incentives included in the Inflation Reduction Act (IRA). 
 
The three notices, released on November 3, 2022, focus on (1) the section 45W qualified commercial clean vehicles credit and the section 30C alternative fuel vehicle refueling property credit; (2) the section 45Q carbon sequestration credit; and (3) the section 45V clean hydrogen production credit and section 45Z clean fuel production credit.
 
The IRA provides a tax credit for alternative fuel refueling property (i.e., electric vehicle chargers) to property placed in service before December 31, 2032. The credit provides a 30% tax credit on alternative fuel refueling property up to $100,000. Further, if the alternative fuel vehicle refueling property is depreciable property, the credit is 6%, unless the labor-related provisions have been satisfied; in that event, then the credit will be 30%. Additionally, the provision requires alternative fuel refueling property to be placed in service in a low-income community or a nonurban area.
 
The credit for commercial EVs is the lesser of 1) 15% of the vehicle’s basis (30% for vehicles not powered by a gas or diesel engine) or 2) the incremental cost of the vehicle over the cost of a comparable gas- or diesel-powered vehicle. The maximum credit per vehicle is $7,500 for vehicles with a gross vehicle weight under 14,000 pounds and $40,000 for heavier vehicles.
 
Comments on the credits are due December 3, 2022.

 

 
  
NEPA to Issue Phase 2 Rule in January
 
The White House Council on Environmental Quality (CEQ) plans to release the Phase 2 National Environmental Policy Act (NEPA) rule in January 2023. This second rule follows the Phase 1 regulation finalized in April 2022. 
 
While CEQ has intended to issue the regulation to overhaul how agencies implement the National Environmental Policy Act (NEPA) in August, the development of the proposed Phase 2 rule has taken longer than anticipated. The CEQ cited the enactment of the Inflation Reduction Act as an example of a recent development that the CEQ had to consider the impacts and incorporate into the pending proposal.
 
The Phase 2 rule is expected to address a host of complex issues that the Biden administration left out of its Phase 1 rule, which was relatively narrow. The Phase 1 rule marked three core changes to NEPA. Under the final rule agencies again are required to assess direct, indirect, and cumulative effects. The rule also reverts to the prior definition of a project's "purpose and need" to stress it is not the applicant's prerogative; and states that the CEQ rule is the floor, not the ceiling, for how agencies implement NEPA when they review major federal actions. 
 
The CEQ has also stated its intention to release a third action, developing guidance for how to consider greenhouse gases and climate change in NEPA reviews.  

 

 
  
NLRB Issues Proposed Rule on Union Elections
 
The National Labor Relations Board (NLRB) has issued a Notice of Proposed Rulemaking (NPRM) rescinding portions of its 2020 union representation procedures. The proposed rule, labeled as the “Fair Choice and Employee Voice” rule, would impact the Board’s procedures on blocking charges.  The NLRB is accepting comments through January 3 on the NPRM.
 
Under a rule issued in 2020 during the Trump administration, if a party to an election files an unfair labor practice charge while an election is pending, the election is held as scheduled with the NLRB impounding the ballots until a determination is made concerning the charge. 
 
Before the 2020 rule, NLRB staff had the authority to delay processing election petitions while a related case alleging illegal labor practices was being litigated. The NPRM would allow regional directors to once again delay a pending election if a party has filed an unfair labor practice charge and “if the conduct alleged threatens to interfere with employee free choice.”  

 

 
  
Canada Seeks to Join IPEF
 
On October 27, 2022, Canada announced its intention to seek membership in the U.S.-led Indo-Pacific Economic Framework for Prosperity (IPEF).
 
The IPEF includes 13 countries in addition to the U.S.: Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and Vietnam. In September, the 13 members agreed on the key outlines for negotiating four major "pillars" of a future agreement, including trade, supply chain resilience, green energy and environmental standards, and anti-corruption and tax measures. 
 
Canada is an original member of the Trans-Pacific Partnership, the free-trade agreement negotiated during the Obama administration between 12 countries in Asia-Pacific, North America, and South America. President Trump ultimately withdrew from the deal and the agreement moved forward without the U.S. as the Comprehensive and Progressive Agreement on TPP (CPTPP), of which Canada remains a member.