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The recently passed, once-in-a-generation tax law—the product of years of advocacy from the NAM—delivered much-needed pro-growth tax policy for manufacturers in the U.S. To build on that win and ensure the law is as beneficial as possible for manufacturers, there are several key implementation steps the administration can take, the NAM told the Treasury Department this week.

What’s going on: “The One Big Beautiful Bill Act was a historic achievement that built on the success of [the 2017 Tax Cuts and Jobs Act], making permanent a tax code that drives manufacturing investment and adapts to the increasingly competitive global economy,” the NAM told Treasury.

• The NAM argued that implementation decisions are crucial “to maximize the bill’s impact on economic growth and minimize the compliance burden on manufacturers.”

What should be done: NAM-recommended Treasury moves with regard to the OBBBA—picked up in a Tuesday Bloomberg Government story (subscription) and Politico’s Morning Tax newsletter—include the following:

• Factories deduction: The new law lets manufacturers immediately deduct the full cost of building a new factory. The NAM urged Treasury to make sure the guidance helps manufacturers adapt to evolving advanced manufacturing technologies and includes key support areas inside a facility.
• Research expensing: The law restores immediate expensing for research costs and lets companies catch up by claiming deductions from past years now and next year. The NAM is pushing Treasury to make sure taxpayers can take the full value of both past and current year research deductions, avoiding offsets in other parts of the tax code that limit research deductions for taxpayers and the ability of manufacturers to drive innovation.
• Interest deductibility: The law restores the TCJA’s pro-growth interest deductibility standard. The NAM is urging Treasury to provide transition rules that recognize how manufacturers have planned their past investments, and to provide clarity on how the rules will work for multinational companies so that they can continue to compete globally.
• No tax on overtime: The law creates a new deduction for workers who receive overtime pay. The NAM asked Treasury to reduce the compliance burden for employers and avoid further increases in tax compliance costs.
• Foreign entities of concern: The law introduces new safeguards for energy tax credits to ensure the incentives aren’t being provided to global competitors like China. The NAM is urging Treasury to spell out clear guidance so manufacturers can understand how the rules apply to their global supply chains while expanding domestic energy dominance.

Keeping our promises, again: “Manufacturers are preparing to deliver on the promise of economic growth that the tax bill makes possible. With a permanent, competitive tax code, manufacturers are expanding investment in research, workers and capital, leading to more jobs, higher wages and accelerated economic growth and innovation,” the NAM concluded.