WASHINGTON ALERT
Stephanie Salmon, Artemis Strategies; Jeff Hannapel & Christian Richter, The Policy Group, Washington, D.C.
Tax Breaks to Expire S
everal key business tax breaks currently available to metal- casters are set to expire Dec.
31, and with other public policy matters taking higher priority in Congress, the extension of these tax provisions is unlikely. Metalcasters should consult with
their tax advisors to plan for the effects of the expiring tax credits and deduc- tions. Te expiring tax credits that are most relevant to the metalcasting
industry include: • R&D Tax Credit—Te research credit, used by metalcasting facili- ties of all sizes, provides up to 20% of qualifying research expenditures for amounts paid or accrued before Jan. 1, 2012.
• Work Opportunity Tax Credit (WOTC)—The WOTC allows a credit to employers who hire members of certain targeted groups of up to 40% of first-year wages up to $6,000 per employee ($12,000 for qualified veterans).
• Differential Wage Payment Credit for Employers—Eligible small business employers that pay dif- ferential wages can claim a credit equal to 20% of up to $20,000 of differential pay made to an employee during the tax year. Differential wages are payments
ON THE HILL
House Committee Approves Regulatory Reform Bill
On Oct. 26, the U.S. House Commit- tee on the Judiciary passed Regulations from the Executive in Need of Scrutiny Act (H.R. 10), which would require all federal rules resulting in an economic impact of $100 million or more be ap- proved by the U.S. Congress. More than 200 major regulations are in the pipe- line, seven of which will together cost the economy more than $100 billion. House Majority Leader Eric Cantor
14 | MODERN CASTING December 2011
(R-Va.) has promised to bring the bill, which has more than 190 co-sponsors, to a vote before the full House of Representatives. A similar bill, S. 299, has been introduced in the Senate by Rand Paul (R-Ky.). The House Judiciary Committee also held a hearing on Oct. 25 to examine bipartisan legislation, the Regulatory Ac- countability Act of 2011 (H.R. 3010), which would update the 65-year-old regulatory process. A companion bill (S. 1606) was introduced in the Senate by Rob Portman (R-Ohio) and Mark Pryor (D-Ark.).
House Panel Fights NLRB Regulations
The U.S. House Committee on Education and the Workforce ap- proved the Workforce Democracy and Fairness Act (H.R. 3094) on Oct. 26. The measure would effectively undo the criteria used to determine an appro- priate bargaining unit established by the National Labor Relations Board’s (NLRB) recent Specialty Healthcare decision and prevent it from pursuing proposed changes to representation election procedures.
MEASURES SUCH AS THE R&D TAX CREDIT AND WORK OPPORTUNITY TAX CREDIT ARE NOT EXPECTED TO BE RENEWED IN 2012.
to employees while they are on ac- tive duty with the U.S. uniformed services (for more than 30 days) that represent all or part of the wages they would have otherwise received from the employer. Te tax deductions set to expire this
month include: • 100% Bonus Depreciation—The
100% bonus depreciation allow- ance applies for qualified property acquired and placed in service after Sept. 8, 2010, and before Jan. 1, 2012. For qualified property ac- quired and placed in service after Dec. 31, 2011, and before Jan. 1, 2013, only a 50% bonus depreciation allowance will apply.
• Expensing Allowance—Te maxi- mum amount of capital expen- ditures that may be expensed under Code Section 179 for tax years beginning in 2010 or 2011 is $500,000 ($250,000 for quali- fied real property). For tax years beginning in 2012, the maximum amount will be $125,000 (in- dexed for inflation with 2006 as the base year).
• Expensing of Environmental Re- mediation Costs—Taxpayers may elect to treat qualified environ- mental remediation expenses that otherwise would be chargeable to
a capital account as deductible in the year paid or incurred, but only if the expenses are paid or incurred before Jan. 1, 2012.
• Empowerment Zone Tax Breaks— Te designation of an economi- cally depressed census tract as an “Empowerment Zone” makes businesses within such a zone eligible for special tax incentives, including the 20% wage credit un- der Code Section 1396, liberalized Code Section 179 expensing rules, tax-exempt bond financing under Code Section 1394, and deferral under Code Section 1397B of capital gains tax on qualified assets sold and replaced. Empowerment Zone designations expire on Dec. 31, 2011.
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