Tax Letter in Support of Preserving Business Interest Deductions
The undersigned associations, representing thousands of businesses and workers throughout the U.S. economy, write in strong support of permanently preserving the current limit on business interest deductions—which is scheduled to expire in 2022. Current law limits businesses’ interest expense deductions to 30% of earnings before interest, tax, depreciation, and amortization (EBITDA) for tax years through 2021. Starting in 2022, interest deductions will be limited to 30% 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.