Manufacturers Weigh Impact of Tax Bill

Posted: 05/27/10 at 3:05 PM

SOCMA today participated in a policy teleconference led by the National Association of Manufacturers (NAM) to discuss, among other legislative topics, a bill (HR 4213) to extend the research and development tax credit, an important legislative priority for SOCMA. It will also be among the issues SOCMA members will discuss with their members of Congress as part of SOCMA’s Washington Fly-In  next month.

The House of Representatives is poised to vote this week on the bill, which includes $144 billion in tax breaks as well as tax increases and extends unemployment benefits. However, it appears that the bill will be taken up after Congress returns from its Memorial Day recess. The downside of the bill, according to NAM, is that $56 billion of tax breaks would be offset by tax increases directed at the business community. Specifically, multi-international companies could face $40 billion in tax increases through eight different provisions in the bill.

NAM, like SOCMA, has expressed support for tax relief, particularly the R&D tax credit. However, the taxes being proposed to off-set the tax credits has caused NAM to take a neutral position on the bill. The U.S. Chamber of Commerce announced this week that they oppose the bill because of the taxes on multi-national companies. The House is having trouble getting enough votes to pass the bill as moderate Democrats and Republicans oppose the spending provisions.  The Senate, for its part, could take up the bill as early as tomorrow if the measure passes the House.

For more information about the Tax Extenders Bill or SOCMA’s position on the R&D Tax Credit, please contact Bill Allmond at (202) 721-4122.



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