Recently, the Joint Committee on Taxation published a report entitled “Tax Incentives for Domestic Manufacturing” (JCX-15-21) which was used by members of the Senate Finance Committee in a March 16, 2021 hearing titled “Made in America: Effect of the U.S. Tax Code on Domestic Manufacturing.” The report is divided into two parts.
Part 1: The first part provides a description and economic analysis of the following: (1) the present-law income tax rates and rules relating to depreciation (including certain first-year expensing provisions) together with associated recapture provisions; (2) the domestic research incentives and the credit for certain advanced energy projects that re-equip, expand, or establish a manufacturing facility for certain energy-related property; and (3) the prior-law deduction for income attributable to domestic production activities.
Part 2: The second part of the document provides (1) economic analysis relating to tax incentives for domestic manufacturing (including concepts of user cost of capital and effective marginal tax rates); (2) analysis of specific tax incentives relating to manufacturing; and (3) analysis of macroeconomic data relating to investment and gross domestic product, as well as data on manufacturing output and employment.
If you have any questions relating to how existing law or the proposed incentives referred to above may affect your business, then please contact our firm.
Frank L. Leffingwell is a tax attorney in the firm’s Tax Planning & Controversy, Estate Planning & Trusts, and Real Estate practice groups.