December 7, 2023

Washington Wire: Urge Congress to Act on Critical Tax Provisions

12/06/2022

 

Action Alert: Urge Congress to Act on Critical Tax Provisions
 
Do you use the R&D Tax Credit, Bonus Depreciation, or 163(j) business interest deduction? Do you save thousands and possibly millions each year? We need to apply pressure on Congress to act on these critical tax provisions. Without hearing from you, we won’t get our chance at a vote. You need to act now and send a letter to your Senators and Representatives calling on them to reinstate immediate expensing for the Research and Development Tax Credit; tell them to prevent 100% Bonus Depreciation from sliding to 80% on January 1, 2023; and remind them that small businesses use the now limited 30% EBITDA 163(j) interest deduction.
 
You have to act now; Congress has returned to Washington and we have only days to get this done 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!

 

 
  
Congressional Lame Duck Session Underway
 
Lawmakers on Capitol Hill continue to face a daunting list of unfinished business. Following the November 8th election, members of the House and Senate, including those defeated or retiring, returned to Washington with a looming December 16 government funding deadline. Most expect Congress to extend the FY2023 temporary funding bill at least another week through December 23rd, and possibly until December 31st, to allow lawmakers more time to negotiate a final omnibus spending bill to fund the government through September 30, 2023.  
 
It is on this government spending omnibus bill that One Voice is lobbying to include the tax extenders provisions to address R&D expensing, 163(j) business interest deduction, and the lowering of 100 Bonus Depreciation to 80 percent starting January 1, 2023. In addition to the government spending bill, lawmakers are working to finalize the National Defense Authorization Act, the Pentagon’s policy bill that Congress has passed each year since 1961. 
 
Many in Washington, D.C. expect a long lame duck session to address these and other issues that may not conclude until around Christmas or possibly New Year’s eve.

 

 

 
USMCA Dispute Panel Files Initial Report
 
The U.S.-Mexico-Canada Agreement (USMCA) dispute settlement panel regarding the rules of origin for automotive vehicles under the agreement. A confidential version of the preliminary report was filed on November 14 and a public version of the final report should be available by the end of the year or early January.
 
The conflict focuses on differences over how to calculate the percentage of a vehicle that comes collectively from the three countries. Both Mexico and Canada believe the trade deal stipulates that more regionally produced parts should count toward duty-free shipping than the U.S. wants to allow. Mexico has said the U.S. is not recognizing alternate methodologies for calculating regional value content it contends were negotiated under the deal to help automakers meet regional value content requirements, raised from those under the North American Free Trade Agreement. The U.S. however believes that “any interpretation of the automotive rules of origin that effectively reduces the effective regional value content of a vehicle produced in North America runs counter to the goals” of the agreement.
 
The three countries held consultations on the disagreement in August but failed to resolve the issue. 

 

 
  
WOTUS Update Coming Soon
 
The U.S. Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers (Corps) will soon issue a final interim definition of "waters of the United States" (WOTUS). The White House Office of Management and Budget (OMB) completed its review of the regulation on November 30 advancing the rule toward publication. 
 
The interim definition is the first in a two-step process to update the regulation defining WOTUS under the Clean Water Act (CWA). First proposed last November, this first step seeks to establish a constant definition that will help provide "stable implementation" of the CWA while the Biden administration develops a durable definition of WOTUS, which is expected to be proposed in November 2023.
 
The rule interprets WOTUS to mean the waters defined by a collection of Corps and EPA regulations referred to as the "1986 regulations," with amendments to reflect the agencies' interpretation of the statutory limits on the scope of WOTUS as dictated by Supreme Court decisions on CWA jurisdiction in the 2000s.
 
The rule would interpret WOTUS to include: traditional navigable waters, interstate waters, the territorial seas, and their adjacent wetlands; most impoundments of WOTUS; tributaries to traditional navigable waters, interstate waters, the territorial seas, and impoundments that meet either the relatively permanent standard or the significant nexus standard; wetlands adjacent to impoundments and tributaries, that meet either the relatively permanent standard or the significant nexus standard; and "other waters" that meet either the relatively permanent standard or the significant nexus standard.
 
The issue is also being considered by the Supreme Court in its review of Sacket v. EPA, a long a long-running dispute regarding whether certain wetlands WOTUS subject to protection under the CWA. In the case, the Court is reviewing what standard is to be used when deciding if a body of water qualifies as a WOTUS. Specifically, the Court is examining whether EPA’s reach extends to wetlands that are connected below the surface to federal waters.
 
  
USTR Extends COVID Tariff Exclusions
 
The Office of the U.S. Trade Representative has extended the exclusions from the Section 301 tariffs on Chinese goods for 81 COVID-related products. The official notice, published in the Federal Register on November 29, 2022, extends the exclusions for three months.
 
USTR originally provided exclusions for 99 products needed to fight the COVID-19 pandemic which are covered by the Section 301 investigation into China's acts, policies and practices related to technology transfer, intellectual property, and innovation. These included such goods as disposable face masks, surgical gloves, hand sanitizer, and X-ray equipment. These exclusions for medical care products to address COVID–19 were published on December 29, 2020, and subsequently extended. 
 
In November 2021, after receiving comments from stakeholders, USTR extended the exclusions for 81 of the 99 COVID-related products for six months and allowed the remainder to expire on November 30, 2021. The 81 exclusions were further extended in June for an additional six months and were set to expire on November 30, 2022. This latest extension will keep the exclusions in place until the end of February 2023. 
 
USTR is reviewing all of the tariffs imposed on China under Section 301 of the Trade Act of 1974 during the Trump administration. The tariffs will remain in place as USTR continues its statutorily required review.