Insight from Hall Kistler & Company on Manufacturing: What President Obama’s Manufacturing Budget Proposal Means
By S. Franklin Arner, CPA, Partner
Under President Obama’s budget proposal for manufacturing, there are incentives for small business which will permanently extend increasing the expensing of qualified property for small business. Under Code Sec. 179, there is a $500,000 deduction limit and phase-out beginning at $2 million, including an index for inflation for tax years beginning after 2013. President Obama is also looking for ways to boost manufacturing and the in-sourcing of jobs. The proposal calls for:
- tax credits for investing in qualified property used in a qualified advanced energy manufacturing project;
- establishing an additional 15 “promise zones” to promote job creation and investment in economically distressed areas;
- creating a general business credit equal to 20% of the eligible expenses paid in connection with in-sourcing a U.S trade or business;
- disallowing tax deductions for expenses paid in connection to outsourcing a U.S trade or business;
- and the creation of a new allocated tax credit referred to as “manufacturing communities tax credit” to support investments in communities that have suffered a major job loss event
For over 70 years, Hall, Kistler & Company has been working with clients in the manufacturing industry. To learn more about President Obama’s proposed incentives, contact our team of certified accountants at Hall, Kistler & Company at 330-453-7633.
