
Nov 6, 2017
“Q&A: What The GOP Tax Plan Means For Distributors & Manufacturers” By Mike Hockett, Manufacturing.net In late September, President Donald Trump and congressional Republicans unveiled an outline of a proposed tax plan that Trump has boasted as the largest in U.S. history. On Sept. 29, Trump provided the broad strokes of that plan in a speech to the National Association of Manufacturers in Washington D.C., with the $6 trillion plan including significant tax cuts for corporations, simplified tax brackets and nearly double the standard deduction used by most tax filers. However, the finer details of the plan are still largely unknown by the general public. Aside from a 2015-2016 industrial recession, industrial distributors and suppliers have often cited tax burdens and regulations as hurdles to business growth, so those companies would be wise to keep tabs on what a new tax plan would involve for them. ID recently spoke with Jim Brandenburg, Tax Partner at Sikich LLP, about what Trump’s tax plan means for manufacturing, especially for distributors. Brandenburg’s extensive knowledge of tax legislation and experience working with distributors and manufacturers give him a unique perspective discussing current tax impacts and what future implications could be of the proposed tax plan. ID: From what you’re hearing, what are distributors and manufacturers’ biggest criticisms/pain points with the current tax structure/regulations? Jim Brandenburg: High tax rates and uncertainty regarding tax policy and various tax provisions are ongoing pain points for manufacturers and distributors. Uncertainty stems from the fact that many benefits that enable a company to reduce their annual tax burden are not permanent, which hinders a company’s ability to plan too far into the future. For example, under current law, bonus depreciation, which allows companies to immediately deduct the cost of newly purchased assets (e.g., machinery and equipment), is set to be reduced in 2018, reduced again in 2019 and then expire in 2020. The tax reform debate creates additional uncertainty and leaves companies in a holding pattern as they wait and see whether any legislation will pass at all and, if so, what form the final legislation will take. However, manufacturers and distributors have long sought lower tax rates and would welcome the decrease in the corporate and small business pass-through...