Taxation
HARDI is advocating for the extension of the Tax Cuts and Jobs Act (TCJA) to protect crucial business tax incentives that drive investments in member businesses. These incentives are vital for fostering growth and ensuring the competitiveness of HVACR companies, particularly in the face of evolving market demands and regulatory landscapes.
Taxation Content
Impact of the TCJA on the HVACR Industry
The TCJA, implemented in 2017, introduced several provisions that have been beneficial to businesses within the HVACR industry. Key among these is the reduction in corporate and pass-through tax rates, which has allowed HVACR companies to reinvest savings into their operations, enhance research and development, and expand their workforce. Additionally, the TCJA includes immediate expensing provisions, enabling businesses to deduct the cost of qualifying property and equipment in the year it is placed in service. This has been instrumental in encouraging investments in new technologies and infrastructure improvements.
Need for Extension
Many of the TCJA's provisions are set to expire at the end of 2025. HARDI is actively lobbying for the extension of these provisions to maintain a stable and favorable business environment. Extending the TCJA provisions will ensure that HVACR companies continue to benefit from reduced tax burdens, which is essential for ongoing investments in innovation and workforce development.
Business Tax Incentives and Economic Growth
Business tax incentives are crucial for the economic growth of the HVACR sector. These incentives help small and medium-sized enterprises compete on an equal footing with larger corporations. By lowering the effective tax rate and providing immediate expensing options, businesses can allocate more resources towards enhancing product offerings, improving service delivery, and adopting environmentally friendly technologies. This is particularly important as the industry faces increasing pressure to meet decarbonization goals and improve energy efficiency.
HVAC Incentives Included in Inflation Reduction Act
The Inflation Reduction Act (IRA), included several incentives like Section 25C, 25D, 45L, and expansion of 179D to help sell high-efficiency equipment. Green tax credits like these have been mentioned as possible pay-fors for the extension of TCJA. HARDI is working to protect these traditionally bipartisan tax provisions.
The extension of the Tax Cuts and Jobs Act is essential for protecting business tax incentives that foster investment, innovation, and growth within the HVACR industry. Maintaining these provisions will help ensure that HVACR companies remain competitive, continue to invest in new technologies, and contribute to the overall economic health of the industry.
