The ability of both manufacturers and the contract companies they utilize to claim tax deductions would be a huge boon to domestic manufacturing in America according to U.S. Senator Debbie Stabenow, and that is why she has announced another attempt to pass legislation to amend the U.S. tax laws accordingly.
Senator Stabenow today has announced the legislation which would amend U.S. tax laws to support American manufacturers and to create jobs here at home. The bill makes it clear that both companies using contract manufacturers and the contract manufacturers themselves are eligible to claim tax deductions that reward domestic manufacturing activities in the United States. U.S. Senators Rob Portman (R-OH) and Sherrod Brown (D-OH) also introduced the legislation.
Senator Stabenow contends, “We don’t have an economy or a middle class unless we make things and grow things.” She adds, “This bill makes a common sense change to our tax policies that will encourage manufacturers to create more jobs here at home.”
Section 199 is one of the largest tax incentives that benefits domestic manufacturing. It provides companies with a 9-percent deduction on their income from domestic manufacturing activities, giving those activities a lower effective tax rate and making U.S. manufacturing a more attractive investment.
Under current tax law, it is unclear whether a company using a contract manufacturer or the contract manufacturer itself is eligible to claim the deduction. Senator Stabenow’s legislation would clarify tax law to allow both entities to claim the Section 199 tax incentive for domestic manufacturing. Stay tuned.
