While the $79bn legislation features enhanced child tax credit provision, expanded low-income housing tax credit and disaster tax relief, among other policies, the American Bakers Association (ABA) actively advocated for its restoration as it would renew key business investment deductions that impact the commercial baking sector.
Since 2017, the tax code has allowed American manufacturers to utilize full and immediate expensing. However, the lapse of
Small businesses have been most acutely impacted by the lapse of key – (1) the deduction for domestic R&D expenses; (2) the EBITDA standard for determining the limitation on business interest; and (3) 100% bonus depreciation – which this bill would finally address.
H.R. 7024 would reinvigorate domestic small business investment by reducing the associated tax costs while increasing tax certainty and simplicity. It raises the small business expensing cap, increasing the amount of investment that a small business can immediately write off to $1.29m from the $1m cap enacted in 2017.
It also enables business owners to deduct the cost of purchased capital equipment in the year it was purchased instead of being depreciated under confusing Internal Revenue Service (IRS) rules. H.R. 7024 extends the application of interest deductions to compute alternative taxable income (ATI) – without regard to any deduction allowable for depreciation, amortization or depletion (EBITDA) – to the tax years beginning after December 31, 2023, and before January 1, 2026.
The bill also renews a tax deduction for research and development costs for businesses. Since the break expired, companies have had to amortize R&D expenses, meaning they faced a higher tax burden.
The legislation will now have to be passed by the Senate; however, the White House has indicated that President Joe Biden supports the plan.
Chairman of the House Committee on Ways and Means, US congressman for Missouri's 8th District and fourth generation farmer, Jason Smith said H.R. 7024 will help American businesses grow, create jobs, and sharpen their competitive advantage against China.
“This will create over $70bn in new R&D investment and over 900,000 new jobs; increase small business investment by $400bn and generate $58bn in additional take-home pay for American workers,” he added.
ABA president and CEO Eric Dell has applauded the move, noting it is “a step toward restoring tax policies that are vital to the commercial baking sector.”
Added Rasma Zvaners ABA VP of Regulatory Affairs, “Seeing the results of our members’ efforts to weigh in with their Members of Congress on important business issues is rewarding. These tax policies will empower the commercial baking sector to grow its operations, expand facilities and invest for the future.
The packaging landscape in 2024
Meanwhile, ABA – the largest wholesale baking association in the US – will be hosting its annual AMERIPEN overview of the packaging landscape online on February 8.
AMERIPEN is the only organization exclusively focused on US public policy for the entire packaging industry.
Rob Keith, AMERIPEN’s Membership & Policy director, will run through the EPR state legislation expectations aimed at packaging materials. He will also highlight the regulatory process for Colorado, California, Oregon and Maine as these states continue program implementation as mandated by law.
International trade issues and homeland security on the menu
In a demonstration of bipartisan dialogue, the American Bakers PAC Dinner – taking place during the 2024 ABA Convention (April 14-17, Scottsdale, Arizona) – will feature a point-counterpoint conversation between former Senator Roy Blunt (R-MO) and former Representative Val Demings (D-FL) to address some of the critical issues the country is currently facing.
Senator Blunt has advised presidents and represented the US government in key world regions. He also served on the Intelligence Committee in both the House and Senate, developing a deep understanding of international trade issues.
Representative Demings has served in the House of Representatives, including the Judiciary, Intelligence, Homeland Security and Oversight and Government Reform committees. Before joining Congress, she worked in law enforcement, serving at every rank level at the Orlando Police Department. She was Orlando’s first female chief of police and managed to reduce violent crime by more than 40% during her tenure.
“With their extensive experience in public service and national affairs, Senator Blunt and Congresswoman Demings will undoubtedly bring a lively and insightful discussion to this year’s PAC Dinner,” said American Bakers PAC chair Stephanie Tillman, chief legal counsel for Flowers Foods.
“We are excited to hear their perspectives on the critical issues impacting the baking industry, now and in the future.”
ABA and ASB partner to advance training
The ABA is collaborating with the American Society of Baking (ASB) to boost educational opportunities for baking industry professionals.
The partnership sees ABA’s Bakers Manufacturing Academy courses added to ASB’s Learning Management System (LMS), which will make these resources more convenient and accessible to the broader industry.
“This collaboration marks a new era for the baking industry’s workforce. By integrating ABA’s comprehensive courses into the ASB Education Hub, we’re furthering the reach of this essential skillset,” said ABA’s Dell.
Samantha Moore, senior director of Meeting and Education for ABA, said the inclusion of ABA’s courses on the ASB platform simplifies the learning process.
“Professionals can now easily access top-notch training and education without having to navigate multiple systems. It's a game-changer for the industry,” she said.
Added ASB executive director Kristen L. Spriggs, “This effort is aligned with our strategic vision to deliver training, development and educational resources to our growing membership and the commercial baking industry at large.”