S. 559: American Investment in Manufacturing and Main Street Act

The bill, known as the American Investment in Manufacturing and Main Street Act (AIMM Act), aims to modify existing tax regulations regarding the calculation of business interest deductions. Specifically, it proposes to permanently extend the allowance for depreciation, amortization, or depletion when determining the income limit for deducting business interest under the Internal Revenue Code.

Key Provisions of the Bill

• Extension of Tax Allowance: The bill seeks to eliminate the sunset provision that previously restricted certain allowances for depreciation, amortization, or depletion to taxable years starting before January 1, 2022. This means that businesses will have a continuous ability to benefit from these allowances in determining how much interest they can deduct from their taxable income.
• Eligibility: The amendment specifically affects definitions and applications outlined in Section 163(j)(8)(A)(v) of the Internal Revenue Code of 1986, which governs the treatment of business interest expenses.
• Effective Date: The changes proposed by the bill would take effect for taxable years that begin after December 31, 2021, ensuring that businesses can utilize this allowance without interruption.

Implications

The permanent extension of these allowances may encourage businesses to invest more in capital assets, as it affects how much interest can be deducted from taxable income. This could potentially lead to increased investment in manufacturing and other business activities that require significant capital expenditure. The intention is to stimulate economic growth and support American manufacturing on a foundational level.

Relevant Companies

• GE (General Electric) - As a large manufacturing company, GE may benefit from enhanced deductions for interest on loans used for capital investments.
• BA (Boeing) - Boeing, also a manufacturing company, could see advantages in financing new projects, bolstered by the ability to deduct more interest costs.