Last week we attended the Manufacturing Summit: Closing the Divide Between Jobs, Policy, and Growth event. The event was hosted by the Precision Metalforming Association’s Cleveland District (PMA) and the Northern Ohio Chapter of Metals Service Center Institute (MSCI). During the panel discussion, five presidents/vice presidents of companies within the manufacturing industry answered questions and discussed their thoughts and concerns on a number of topics. A major portion of the topics discussed related to tax reform and concerns related to tax issues. Among these issues discussed were the following:
- Companies using the LIFO method of valuing inventory are concerned that President Obama will repeal this method. The impact would mean an increase in the taxable income of the business.
- For companies with operations and income overseas, there is a concern of “double taxation” when they decide to bring the income back into the U.S.
- Companies mentioned the R&D tax as an incentive and want it to be a more permanent credit.
- Companies are concerned with all the EPA regulations. The company owners stated that it is very difficult to be aware of all of the requirements from the EPA.
- Another topic discussed by the owner of a public manufacturing company was an SEC-required disclosure as to whether they use “conflict minerals” that are “necessary to the functionality or production” of a product that they either manufacture or contract to be manufactured that originate from the Democratic Republic of the Congo or adjoining countries. Along with this, if the company is selling their product to a customer that has to report this information, they need to be able to provide the relevant information for the disclosure. It can be very difficult to certify that the product does not contain these minerals, especially if the product is put through numerous processes and then broken down more and more.
If you have any questions relating to these tax issues, please contact your Meaden & Moore representative or Pete DeMarco at 216.928.5345 or firstname.lastname@example.org.