Included in the fiscal cliff tax package passed by Congress on New Years' Day are billions of dollars in tax breaks that should make business of all sorts of industries happier. The new tax law includes tax breaks for industries from film production to rum importation.
A tax break is anything that reduces the amount of total taxes an individual or business must pay. They mainly come in four forms: tax credit, tax deduction, tax exemption, and tax rebate.
More than 50 temporary tax breaks were renewed through 2013, totaling to about $76 billion in savings for their beneficiaries. Due to the breaks' temporary status, tax break renewal attracts heavy lobbying and campaign contributions from the businesses and trade groups that say the the tax breaks help them prosper and create jobs.
Here are some of the provisions enacted in the new law. Take a close look, some of them may benefit your business or industry:
- A tax credit for research and development, benefiting many industries including manufacturers, pharmaceutical companies, and high tech companies- Cost: $14.3 billion
- A tax credit for the production of wind, solar, and other renewable energy- Cost: $12.2 billion
- A provision that allows restaurants and retail stores to more quickly write off the cost of improvements- Cost $3.7 billion
- Increased tax rebates to Puerto Rico and the Virgin Islands from a tax on rum imported into the US- Cost: $222 million
- A 50% tax credit for expenses related to railroad track maintenance through 2013- Cost $331 million
- Enhanced deductions for companies that donate food to the needy, books for public schools or computers to public libraries- Cost: $314 million
- A tax break that allows TV and movie productions to more quickly write off expenses- Cost: $248 million
I can only hope each industry also provided a projected number of jobs it will create and an estimated percentage of the American people the industry has and will serve, seeing that these are necessary for the American economy's rebound going forward.