Rex Heat Treat, a commercial heat treatment company serving industries from aerospace and transportation to construction and defense, is tapping its tax reform benefits to support its workers, strengthen its business and invest in its future. A family-owned company since 1938 with facilities in Lansdale and Bedford, Pennsylvania, and Anniston, Alabama, Rex Heat Treat has been able to keep employees on board and purchase critical new equipment, even in challenging times.
“Without the benefit of tax reform, we might not be sitting in as good of a situation as we are,” said Rex Heat Treat General Manager Johnathan Rex. “We’d be a lot leaner in our bank account, possibly needing to draw on a line of credit to make payroll otherwise. As we weather the effects of COVID-19, these benefits will help us. Our business has more time to maintain our critical infrastructure workforce should this current situation continue on.”
In particular, the manufacturer has been able to use “full expensing,” which allows businesses to take a tax deduction for the cost of new equipment in the year it is bought, rather than taking smaller tax deductions over several years. This reduces the cost of buying capital equipment and accelerates depreciation deductions for manufacturers and business owners, which decreases the company’s tax bill in the year of purchase and frees up cash for that purchase. For a capital-intensive industry like manufacturing, where the latest technology is key to production, this kind of support can be vital, especially among smaller manufacturers with tighter margins.
“Full expensing allows us not just to accelerate the last investment we made but to accelerate the next one—because it’s cash in hand,” said Rex. “We want to do this as quickly as possible, but you can also run your business into the ground if you invest too quickly. Allowing a company to aggressively invest in itself and maintain some cash is a big help.”
As manufacturers around the globe deal with the challenges posed by COVID-19, tax reform has helped give small businesses the resources to protect their employees and their customers.
“Tax policies that allow manufacturers to keep and invest more of their earnings are critically important in uncertain times,” said National Association of Manufacturers Vice President of Tax and Domestic Economic Policy Chris Netram. “As we respond to today’s challenges and prepare for the future, building upon pro-growth policies like these can help support workers, businesses and communities nationwide.”
Manufacturing businesses have long been proponents of equality in the workplace. As legislation to codify protections for LGBT individuals passes through the House of Representatives, the National Association of Manufacturers joined the U.S. Chamber of Commerce, Business Roundtable, and other members of the business community in advocating its passage, forging coalitions and providing congressional testimony.
Introduced with bipartisan support in the U.S. House and Senate in March, the Equality Act includes federal protections for individuals based on sexual orientation and gender identity under the existing framework of the Civil Rights Act, which already provides protection against discrimination on the basis of religion, national origin, race, color or sex. The goal of the legislation is to ensure that no person can face legal discrimination based on their gender or sexual orientation, setting a clear federal standard to enable individuals to succeed based on their abilities and qualifications to perform a job.
“Employers understand the importance of creating an environment in which the very best people can succeed based on merit,” Patrick Hedren, NAM vice president, labor, legal and regulatory policy, said. “At the same time, manufacturers know that discrimination in any form is antithetical to the values that we work to uphold every day: equality of opportunity, individual liberty, free enterprise and competitiveness.”
In March, more than 40 other industry associations rallied to support the Equality Act, providing an important boost for the groundbreaking legislation. In the weeks since, manufacturing representatives have testified before the House Education and Labor Committee and signed a coalition letter to the House Subcommittee on Civil Rights and Human Services calling for the Act’s passage. As Congress considers the way forward, manufacturers have made clear that they intend to advocate forcefully on behalf of the legislation and uphold their commitment to workers of every gender identity and sexual orientation.
“The Equality Act creates a clear federal standard that matches the sentiments manufacturers already share: gender identity and sexual orientation have no impact on an employee’s abilities and discrimination is not welcome on the manufacturing floor,” Hedren said. “We look forward to working with Congress as this important legislation moves ahead.”
Washington, D.C. – National Association of Manufacturers (NAM) President and CEO Jay Timmons released the following statement after the Department of Labor (DOL) rescinded the 2016 Persuader Rule:
Manufacturers have fought for this victory for many years in the courts, in Congress and with two administrations, using the full weight of our policy, government relations and legal teams, said Timmons. The NAM’s Manufacturers’ Center for Legal Action was able to halt the rule in court in 2016.And in 2017, the Trump administration, as part of its broader regulatory relief agenda, thankfully began the process of unwinding the rule. This overreaching rule threatened to impose serious burdens on manufacturers and upend employee–employer communications. Now manufacturers are relieved that this threat to workplace communications is finally and officially off the books. Commonsense steps like this to rein in onerous regulations are a major reason why manufacturers are reporting record-high business optimism.
The Manufacturers’ Center for Legal Action (MCLA) is the leading voice of manufacturers in the courts and engages in a range of activities, including direct party litigation and operating a robust amicus program, as well as educating manufacturers about emerging legal trends. The MCLA is led by NAM Senior Vice President and General Counsel Linda Kelly and NAM Vice President of Litigation and Deputy General Counsel Peter Tolsdorf. More information on the MCLA can be found here.
The National Association of Manufacturers (NAM) is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12 million men and women, contributes $2.25 trillion to the U.S. economy annually, has the largest economic impact of any major sector and accounts for more than three-quarters of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the Manufacturers or to follow us on Shopfloor, Twitter and Facebook, please visit www.nam.org.