Stephanie Salmon, AFS Washington Office; Jeff Hannapel & Christian Richter, The Policy Group, Washington, D.C. WASHINGTON ALERT Key Tax Breaks Expired
AS SOME TAX BREAKS GO WITHOUT RENEWAL, OTHER TAXES AND EXPENSES ARE BEING ADDED. As of January 1, more than 50 different
tax breaks expired and will likely increase the tax bills of some metalcasting facili- ties if these provisions are not renewed, including: • Research and Development (R&D) Tax Credit: Tis credit dates back to 1981 and has been extended 14 times. Te credit allowed compa- nies that perform certain types of research to write off some of their expenses, from the scientists’ wages to various equipment.
• Section 179 Expensing: Te deduc- tion allowed small and midsize business owners to immediately deduct an amount used to obtain
ON THE HILL
Conflict Minerals Opponents Challenge SEC Rule
In January, a federal appellate panel heard oral arguments against the Secu- rities and Exchange Commission (SEC) conflict minerals disclosure rule. The industry attorney, representing the U.S. Chamber of Commerce and National Association of Manufacturers, ques- tioned whether the requirement that publicly traded companies disclose the use of certain minerals from the war- torn Democratic Republic of the Congo (DRC) violates the First Amendment. The business community has argued the SEC rule is too costly, estimating a cost of about $3 billion to $4 billion initially, then $200 million to $600 million annu- ally. It also contends the nature of the global supply chain makes it difficult to determine whether the minerals at issue (tin, tantalum, tungsten and gold) came from African conflict zones.
The conflict minerals rule was devel- oped to address the humanitarian crisis in the DRC as part of the 2010 Dodd- Frank Wall Street reform legislation. The SEC finalized the rule in Septem- ber 2012, requiring manufacturers to conduct due diligence to determine whether any minerals in their products came from mines in the DRC. If their products contained DRC minerals, they
must disclose the products both to the SEC and on their websites.
The SEC requirements are in effect unless Congress or the courts act. The first conflict minerals compliance report for 2013 under the SEC ruling is due June 2, 2014. While companies may not be required to report to the SEC, manufacturers through- out the supply chain are required to provide information to first and second tier custom- ers in order to meet filing requirements.
Labor’s Notice Posting Rule Void In a legal victory for the business com-
munity, the National Labor Relations Board’s (NLRB) earlier ruling requiring employers to conspicuously display a notice informing employees of their rights under the National Labor Relations Act (NLRA) is officially invalidated for now. In May and June 2013, two separate courts—the U.S Courts of Ap- peals for the D.C. Circuit and the Fourth Cir- cuit—struck down the rule on the grounds it exceeded the Board’s rulemaking authority as delegated by Congress. The Board’s final recourse would have been to file its request for review to the Supreme Court by January 2, which it did not do. The D.C. Court’s ruling did not affect Executive Order 13498, which requires cer- tain federal contractors and subcontrac- tors to post notices informing employees of their rights under federal labor laws.
EPA Issues Emissions Rule for New Power Plants
EPA published its rule limiting carbon emissions from new power plants on January 8. The proposal is a key element of President Obama’s climate change agenda. The draft rules are the first ever to limit greenhouse gas emissions from power plants. The rules require new power plants be built with carbon cap- ture and storage capabilities if they burn coal or that they burn lower emission fuels like natural gas.
The proposal has drawn criticism from coal industry supporters who say carbon capture technology is not suf- ficiently developed at this point to be viable. Manufacturers are concerned about the precedent this rule sets for the currently pending rulemaking on existing power plants and future regulation of greenhouse gas emissions from other industrial sectors. Expect continued oversight of this rulemaking in the House in 2014. The EPA is expected to release draft rules governing emissions from existing power plants, also a centerpiece of President Obama’s climate change plan, by June of this year.
For additional information, contact Stephanie Salmon, AFS Washington Off ice,
202/842-4864,
ssalmon@afsinc.org. February 2014 MODERN CASTING | 21
qualifying equipment rather than slice up the deduction into pieces over time according to a deprecia- tion schedule. Without renewal, metalcasting businesses will see a reduction in the amount of equip- ment purchases they can expense from $500,000 to $25,000.
• 50% Bonus Expensing for Capital Investments: Large companies will lose this tax break.
In addition, the new Patient
Protection and Affordable Care Act (PPACA) tax or fee on health insur- ance companies, estimated to be $14 billion in 2014, likely will be passed on to employers and consumers.
Extending all 55 tax breaks
would cost about $55 billion a year. And if they’re not offset by spend- ing cuts or tax hikes elsewhere, then they would add to the national debt. Congress could extend the tax breaks retroactively at any time this year (in 2012, they weren’t extended until that December). But the longer they go without extension, the harder it is for companies to do tax planning. The American Foundry Society is weighing in with members of the Senate Finance and House Ways & Means committees on the importance of the tax breaks that benefit U.S. manufacturers.
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