Build It in America Act Update

On June 13, 2023 the House Ways and Means Committee voted to pass the “Build It in America Act.” This legislation, which passed along party lines 24-18, includes extensions to multiple expired business provisions, including the ability to deduct 174 expenses.

As part of the Tax Cuts and Jobs Act of 2017, 174 expenditures are required to be amortized over five years starting in 2022. This legislation would retroactively address the issue with 174 expenditures by delaying the amortization requirement until 2026. The bill would allow businesses that have already filed their 2022 return to amend or file a catch-up adjustment in 2023. Additionally, this legislation would allow businesses to calculate the interest limitation under 163(j) based on EBITDA until 2026 and would extend 100% bonus depreciation through 2026.

This bill offsets the cost of these provisions by repealing the clean electricity production tax credit and investment tax credit. These credits were a key portion of the Inflation Reduction Act of 2022. It is important to know that certain credits for previously owned clean vehicles and commercial clean vehicles would also be repealed.

Due to the repealing of these credits from the Inflation Reduction Act, this legislation has little chance of getting through the Senate in the current form. However, it does show the continued interest in addressing the issues surrounding 174 amortization moving forward.

For more insight on the Build It in America Act, join Dave McGuire tomorrow for a Midyear Specialty Tax Update.