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On Tuesday, the U.S. Senate Finance Committee Chairman, Ron Wyden (D-OR) and House Ways and Means Committee Chairman, Jason Smith (R-MO-08) announced a framework for a package of tax improvements for businesses, including reinstating the research and development (R&D) tax deduction – a top priority for the industry.

Since January 2022, businesses, including marine manufacturers, are required to spread R&D expenses over several years – also known as amortization – which has increased the cost of investing in innovation and technological advancements. The agreement would reinstate the full deduction for domestic R&D expenses in the year in which those expenses occurred, thus allowing marine manufacturers to immediately deduct those expenses and remain competitive.

The framework would improve deductions for businesses purchasing machinery and equipment, in addition to other tax credits for housing and children. The framework’s outlook remains uncertain as concerns remain on both sides of the aisle due to the cost of the agreement – $78 billion – and provisions that may have been neglected from final negotiations.

NMMA will continue monitoring the progress of negotiations in Congress and advocating for priorities that assist marine manufacturers.

For more information, please contact NMMA director of federal government relations, Clay Crabtree at [email protected].