The National Association of Manufacturers (NAM) recently urged Congress to temporarily extend a COVID-19 tax relief provision to support manufacturers.
To counterbalance a decrease in earnings since the start of the pandemic, many companies took out loans to stay in business.
Earlier this year, Congress temporarily increased the allowable business interest deduction from 30 percent to 50 percent of earnings before interest, tax, depreciation, and amortization (EBITDA) for tax years 2019 and 2020. This will expire in a few weeks, and the allowable maximum deduction will return to 30 percent of EBITDA.
NAM urges Congress to extend the 50 percent deduction for an additional year to help struggling companies stay in business.
“Congress intended to offer a lifeline to businesses that are struggling in the midst of COVID-19—and although we can see a light at the end of the tunnel, the pandemic still rages on,” Chris Netram, NAM vice president of Tax and Domestic Economic Policy, said. “Manufacturers are calling on Congress to extend this provision for another year so that it does what it was meant to do: support American workers and keep America in business.”
NAM represents 14,000 member companies nationwide in every industrial sector.