Wednesday, December 10, 2014
Wednesday, December 3, 2014
Manufacturers Urge Congress to Pass Important Tax Extenders Legislation
R&D Tax Credit, Section 179 Expensing and Bonus Depreciation
Keys to Keeping U.S. Manufacturing Strong
Washington, DC, December 2, 2014 – The National Tooling and Machining Association (NTMA) and the Precision Metalforming Association (PMA) today urged Congress to pass a tax extenders bill this month that makes key tax provisions used by U.S. manufacturers permanent, including the R&D Tax Credit, Section 179 Expensing and extending Bonus Depreciation for all of 2014 and 2015. These tax provisions, which Congress allowed to expire last year, help NTMA and PMA members and thousands of other manufacturers across the country make investments in technology and hire more workers.
“It’s time for Congress to end the uncertainty and pass a tax extenders bill that makes permanent tax provisions that are boosting manufacturing and creating jobs,” said NTMA President Dave Tilstone. “Manufacturers need to plan ahead and unfortunately Congress is not helping. Uncertainty from Washington about the future of key tax provisions used to grow our businesses causes manufacturers to slow or stop investing.”
In a November briefing at the House of Representatives, PMA Member Wes Smith, President and CEO of E&E Manufacturing in Plymouth, MI, testified that companies like his rely on key tax provisions to have the resources available to make investments and hire more employees.
“If we knew at the beginning of this year that Congress would not extend Bonus Depreciation and Section 179 Expensing, we would not have invested the $13 million we have in 2014 on new equipment,” said Smith, whose automotive supply company employs over 300 workers.
Smith said that manufacturers large and small plan their investments years in advance. “We just spent $10 million on a new set of machines, but that equipment takes over two years to place into service,” Smith said. “How can I plan and finance a two-year, $10 million project when I don’t even know what Congress will do two months from now? We can’t just purchase a machine on December 31st by midnight based on a vote Congress took that day. ”
“Last month, in Atlanta, at the FABTECH Exhibition – North America’s largest trade show for the metal forming, fabricating, welding and metal finishing industries – tens of thousands of owners and executives of manufacturing companies were in the position of having to make decisions on investing hundreds of millions of dollars in new machines, technologies, software and services, without knowing the status of Section 179 Expensing and Bonus Depreciation for either 2014 or for 2015. It was an absolute travesty that these manufacturers were forced to make these decisions without knowing how these expenditures would be treated for tax purposes,” said PMA President Bill Gaskin. “If Congress cannot make these provisions permanent, at the very least, they must extend them for all of 2014 and 2015. Congress needs to pass a tax extenders bill during the Lame Duck session.”
About One Voice: The National Tooling and Machining Association’s (NTMA) and the Precision Metalforming Association’s (PMA) combined “One Voice” federal government advocacy program represents nearly 3,000 metalworking companies and is designed to promote U.S. government policies that will ensure a strong manufacturing sector in the United States. For additional information, please visit www.metalworkingadvocate.org.
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Monday, December 1, 2014
During the first half of November 2014, a series of winter storms delivered heavy snowfall to the Midwest, New England, and regions as far as West Texas. Accumulation amounts were the highest that the National Oceanic and Atmospheric Administration’s National Snow Analysis has archived for the early November timeframe since 2003.
Weather forecasters are predicting another cold winter in the U.S. Below-normal temperatures are expected to encompass two-thirds of the U.S., particularly the East Coast and Gulf Coast. Above-average precipitation and heavy snowfall are expected in these regions. The jet stream over the northern region of the U.S. is expected to be erratic, which could force cold air from the polar and Arctic regions into the U.S., particularly into the East Coast and Deep South.
The West Coast, on the other hand, will experience above-normal temperatures, which means severe drought conditions could worsen. In California, where 60% of the state is suffering the worst category of drought, mountainous snowfall is crucial for recovery. Snowfall amounts, which depend on the strength of winter storms, are difficult to forecast more than seven days in advance.
If extreme cold weather forecasts are accurate, electricity consumers should prepare for the risk of more electricity price volatility. Natural gas demand for heating and power generation is projected to increase steadily. Consumer demand for gas and electricity are typically synchronized. Electricity price trends are closely linked to the natural gas market. Winter weather across the U.S. in 2013-2014 produced the most volatile natural gas daily price swings in several years, and electricity prices climbed, as well.
Stabilize energy costs
Customers who used variable or index prices for gas or electricity supply in January 2014 experienced problematic cost increases. Some electricity suppliers quadrupled the variable price billed to customers from December 2013 through March 2014.
Weather-related events in January and February 2014 are examples of how unforeseen and uncontrollable circumstances can greatly affect gas and electricity prices. Energy consumers are encouraged to mitigate risk exposure to volatile energy prices by using a fixed-price supply contract as soon as possible, to cover supply through at least March 2015. Customers unwilling to commit to a one-to-three year supply contract should at least consider locking in a short-term, four-to-five month supply solution.
Some industry experts now consider extreme weather, and resulting gas and electricity price volatility, as the new norm. Achieving budget certainty now for this winter’s gas and electricity costs is a prudent business decision. For more information, contact consulting firm APPI Energy at 800-520-6685 or firstname.lastname@example.org.
Guest blog post written by Jennifer Samuels, Communications Manager, APPI Energy.