NWRA joined other associations in a letter to House and Senate tax-writing committees, calling on the House and Senate to permanently preserve the current limit on business interest deductions set to expire next year. “If the current limit is reduced, it will become more expensive for small businesses to raise capital, hire employees and grow,” said NWRA President and CEO Darrell Smith. “We urge Congress to preserve the current limit on business interest deductions before they expire.”
Current law limits businesses’ interest expense deductions to 30 percent of earnings before interest, tax, depreciation and amortization (EBITDA) for tax years through 2021. Starting in 2022, interest deductions will be limited to 30 percent of earnings before interest and tax (EBIT). By excluding depreciation and amortization, the stricter EBIT standard will make it more expensive for capital-intensive companies to finance critical purchases and grow their businesses.