A Tax Structure That Supports Growth
A tax code that encourages investments in infrastructure development and allows families and businesses who operate quarries to create and support high-paying jobs is critical to a growing economy. NSSGA supports sensible reforms to our tax laws that remove undue burdens and allow for industry innovation. NSSGA will continue working with Congress and the Biden administration on tax code changes that advance the stone, sand, and gravel industry. NSSGA vigorously opposes any provisions that would adversely impact aggregates operators, including:
- Percentage Depletion: NSSGA will continue to oppose legislative efforts to repeal the percentage depletion allowance. This important provision, incorporated in the tax code since 1926, incentivizes aggregates producers to make new investments by providing a 5 percent capital cost recovery method for sand, gravel, and crushed stone and 14 percent for industrial sand development. Eliminating this provision will increase costs for end-users of aggregates, including federal agencies, and discourage investment.
- Bonus Depreciation: Aggregates producers make costly investments in heavy equipment and machinery to properly run their quarries. This supports our nation’s manufacturing economy and ensures materials are available and competitively priced and is the basis for increasing jobs. The bonus depreciation allowance began to phase out on Jan. 1, 2023. NSSGA supports permanent expansion of this important tool that provides aggregate operators the certainty to make necessary capital investments that creates jobs and grows our economy.
- Corporate Tax Rate: Corporate tax rates must remain globally competitive to allow American labor and materials to compete on a level playing field. NSSGA supports maintaining the current Corporate Federal Tax Rate of 21 percent, without the burdensome complexity of an additional minimum tax. NSSGA also supports efforts to incentivize American manufacturing, which is critical to our economic prosperity.
- Small Business Deduction: NSSGA supports the permanent extension of Section 199A, 20 percent deduction for qualified business income. Over 80 percent of NSSGA members are small producers and family-owned operations that have supplied their local communities for generations. Section 199A is scheduled to sunset at the end of 2025. A permanent extension would bring needed certainty to small businesses and help to further unleash the ingenuity and growth that is powered by small businesses.
- Capital Gains Tax: Encouraging risk-taking investments in innovation and infrastructure has always been a hallmark of the U.S. tax system. The current preference for capital gains should be continued without any income phaseout that would disproportionally affect small family businesses like those in the aggregate industry.
- Estate Tax: NSSGA supports a full repeal of the 40 percent federal estate or “death” tax, which is levied on estates valued at greater than $5 million at the time of death. NSSGA supported the passage of the Tax Cuts and Jobs Act in 2017, which doubled the exclusion from $5 million to $10 million (adjusted for annual inflation) through 2025.