The American Supply Association is part of a coalition urging federal officials to accelerate the usage of general business tax credits.
In a letter to Senate Finance Committee Chair Chuck Grassley (R-Iowa), House Ways and Means Committee Chair Richard Neal (D-Massachusetts), Senate Finance Committee Ranking Member Ron Wyden (D-Oregon) and House Ways and Means Committee Ranking Member Kevin Brady (R-Texas), ASA and its coalition partners explain that current law can prevent companies from fully utilizing general business tax credits, which include more than two-dozen provisions, such as the R&D tax credit, work opportunity tax credit and renewable energy tax credits.
Moreover, the coalition notes the economic downturn wrought by the pandemic is likely to reduce taxable income, further reducing the utility of these incentives.
Accordingly, by amending Section 38 of the Internal Revenue Code to temporarily make these credits refundable on an elective basis, the coalition explains, struggling companies will have immediate access to a source of liquidity that can help provide increased cash flow to support operations, including rehiring workers. As these credits can ultimately be used in future years, this proposal merely accelerates their use to provide relief during this crisis, the coalition adds.
While the country begins to reopen, the need for liquidity remains as urgent as ever, the coalition adds. By temporarily giving companies the option to monetize their general business credits, Congress can help ensure that the recovery is as strong as possible, it notes.
Report Abusive Comment