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Detroit News
July 23, 2008 |
David Shepardson
Staff Writer |
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Automakers May Reap $30 Million Credit Under New Tax Rule |
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Detroit's Big Three automakers each stand to claim up to $30 million in tax credits under a bill that could become law by the end of the week, officials said Wednesday.
The U.S. House passed a housing bill 272-152 late Wednesday that includes a provision allowing unprofitable companies to get credit for up to $30 million in capital investments. An earlier stimulus bill gave profitable companies $45 billion in depreciation credits for investments made during the year.
Instead of the depreciation credits, unprofitable companies could accelerate R&D tax credits or alternative minimum credits in lieu of the depreciation provisions.
The Senate passed a similar version of the housing bill July 11; President Bush said he would support the House bill, which will be taken up by the Senate later this week.
The provision was sponsored by Sens. Debbie Stabenow, D-Lansing, and George Voinovich, R-Ohio.
"By giving an investment incentive to those companies most in need of new investment, the Stabenow-Voinovich provision will encourage economic growth," said Bruce Andrews, Ford's vice president for governmental affairs.
U.S. Rep. Sander Levin, D-Royal Oak, said Detroit's automakers would each benefit from the provision.
"It is only fair that these companies be rewarded for the investments they make under the economic stimulus program," Levin said. "We encouraged companies to make capital investments this year that will help spur economic growth. But companies that do not expect to pay tax this year, in part due to the economic downturn, would receive no benefit regardless of how much they invest. This critical provision would correct that inequity for many companies, including our domestic automakers."
Airlines stand to benefit as do some smaller unprofitable start-up companies, like bio-tech research companies.
Stephen Rapundalo, executive director of MichBio, Michigan's life science industry trade association, said the bill would boost many companies.
"These incentives could be a critical resource to help sustain biotech firms that in turn will assist in diversifying and strengthening Michigan's economy," Rapundalo said.
The Senate said the provision would cost the U.S. Treasury $996 million over 10 years. Stabenow said the provision she championed "is a critical step" to "stimulating the economy and creating quality good-paying middle class jobs here at home."
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To Contact Congressman Levin: -
Email Congressman Levin In Michigan: 27085 Gratiot Ave, Roseville, MI 48066 | (586) 498-7122 | (248) 968-2025
In Washington: 1236 Longworth House Office Building, Washington, DC 20515 | (202) 225-4961
