As the first session of the 114th Congress concluded, congress was able to push through a sweeping tax reform package that will lower marginal tax rates for individuals and corporations, increase the expensing allowance for capital purchases, and change the territorial tax system to one that will enable U.S. corporations to repatriate their offshore profits at a much lower rate.
This tax reform measure is the first major tax reform since the 1986 tax effort under the Reagan Administration. As the tax package was being debated, other provisions were being eliminated such as the qualified business income deduction (section 199). The IC-DISC provision that allows exporters to deduct certain commissions was retained.
The 100% expensing for capital improvements and purchases doubled the 50% depreciation allowance and expanded the categories significantly. This provision is especially important to recycling as it enables recyclers to upgrade their equipment and usher in new and improved sorting and separation technologies that will improve the quality of commodities as well as enable the processing of harder to recycle products and materials. This will also help usher in new safety features in heavy equipment while improving efficiencies. The tax law reduce marginal tax rates for corporations and pass-throughs which positively impacts many small-to-medium sized and family-owned businesses.
As you plan for your capital spending projects, please consider sharing
your prospective purchases with ISRI so that we can report on the economic impacts from the tax reform law to Congress and the Administration. This information helps us raise our profile with Congress and the Administration as an economic driver of the economy.