Interest Deductibility

Protecting Businesses’ Ability to Finance Growth

READ

What’s Going On

Many manufacturers borrow funds to finance long-term investments in equipment and facilities, which in turn help create jobs and enable manufacturers to compete effectively in today’s global economy. At the beginning of 2022, a stricter limitation on the deductibility of the interest payments on business loans went into effect, increasing the cost of financing critical investments in machinery and equipment.

However, as the NAM’s newly released analysis shows, the jobs impact of the stricter limitation has nearly doubled over the past year given congressional inaction to ensure a pro-growth interest deductibility standard as interest rates have continued to rise. The NAM’s new analysis focuses on the impact to the U.S. economy of Congress’ failure to reverse the stricter interest expense limitation that took effect in January 2022. The data shows that limiting manufacturers’ ability to deduct interest on debt-financed investments, over the long run, could cost the U.S. economy up to:

867,000 jobs lost
$58B in employee compensation
$108B in GDP

Advocacy

In Washington: The NAM is rallying America’s business community through our direct engagement with congressional leadership and key tax writers on the need to permanently reverse the harmful EBIT-based limitation and allow manufacturers to continue to invest for growth.

The NAM released a new analysis on the impact to the U.S. economy of Congress’ failure to reverse the stricter interest expense limitation that took effect in January 2022.
In December, the NAM led a letter with over 230 companies and business groups to congressional leadership urging Congress to permanently repeal the stricter interest limitation in order to support businesses’ ability to grow and create jobs here in the United States.
In early 2023, the NAM wrote to Congress and the Biden Administration about the importance of reversing the shift from EBITDA to EBIT.

Don’t miss the latest news and insights from the NAM newsroom and the media on manufacturers’ work to urge Congress to reverse the stricter limitation and allow manufacturers to continue to invest for growth.

Click here to view all NAM tax stories. The latest on interest deductibility:

Become an NAM Ambassador

Become a leading voice on this issue and let the NAM help elevate your company’s advocacy in our collective effort to allow manufacturers to continue to invest for growth.

LEARN MORE