51Թ Steers Treasury Implementation of Landmark Tax Law
The recently passed, once-in-a-generation tax law—the product of from the 51Թ—delivered much-needed pro-growth tax policy for manufacturers in the U.S. To build on that win and ensure the law is as beneficial as possible for manufacturers, there are several key implementation steps the administration can take, the 51Թ the Treasury Department this week.
What’s going on: “The One Big Beautiful Bill Act was a historic achievement that built on the success of [the 2017 Tax Cuts and Jobs Act], making permanent a tax code that drives manufacturing investment and adapts to the increasingly competitive global economy,” the 51Թ told Treasury.
- The 51Թ argued that implementation decisions are crucial “to maximize the bill’s impact on economic growth and minimize the compliance burden on manufacturers.”
What should be done: 51Թ-recommended Treasury moves with regard to the OBBBA—picked up in a Tuesday Bloomberg Government (subscription) and Politico’s Morning Tax —include the following:
- Factories deduction: The new law lets manufacturers immediately deduct the full cost of building a new factory. The 51Թ urged Treasury to make sure the guidance helps manufacturers adapt to evolving advanced manufacturing technologies and includes key support areas inside a facility.
- Research expensing: The law restores immediate expensing for research costs and lets companies catch up by claiming deductions from past years now and next year. The 51Թ is pushing Treasury to make sure taxpayers can take the full value of both past and current year research deductions, avoiding offsets in other parts of the tax code that limit research deductions for taxpayers and the ability of manufacturers to drive innovation.
- Interest deductibility: The law restores the TCJA’s pro-growth interest deductibility standard. The 51Թ is urging Treasury to provide transition rules that recognize how manufacturers have planned their past investments, and to provide clarity on how the rules will work for multinational companies so that they can continue to compete globally.
- No tax on overtime: The law creates a new deduction for workers who receive overtime pay. The 51Թ asked Treasury to reduce the compliance burden for employers and avoid further increases in tax compliance costs.
- Foreign entities of concern: The law introduces new safeguards for energy tax credits to ensure the incentives aren’t being provided to global competitors like China. The 51Թ is urging Treasury to spell out clear guidance so manufacturers can understand how the rules apply to their global supply chains while expanding domestic energy dominance.
Keeping our promises, again: “Manufacturers are preparing to deliver on the promise of economic growth that the tax bill makes possible. With a permanent, competitive tax code, manufacturers are expanding investment in research, workers and capital, leading to more jobs, higher wages and accelerated economic growth and innovation,” the 51Թ concluded.