House Republicans have promised to unveil legislation on Thursday to overhaul the corporate tax code. We took a look at the potential impacts on Oregon businesses.
“Everyone’s got their lobbyists geared up for this,” said Brian Todd, head of corporate tax practice at Davis Wright Tremaine.
Republicans propose slashing the corporate tax rate to 20%, but they have also debated a number of other provisions. Todd said specific tax treatments in the Republican framework apply differently depending on the industry.
Changes to “depletion” rules would benefit timber businesses. The changes would allow companies with mineral or timber resources to reduce their taxable income to account for using up their reserves. Preserving the "research and development" credit is important to technology companies.
Apparel manufacturers with significant global sales, namely Nike, Columbia and Adidas, will closely eye international implications, including a proposal to end the corporate repatriation tax, a tax that applies to foreign profits. *Nike has spent at least $80,000 so far this year lobbying on “general tax issues” that included corporate tax repatriation. Nike holds around $12.2 billion of its profits abroad.
In theory, repatriation allows companies to reinvest foreign income in U.S. operations. In practice, they mostly divide the spoils among shareholders, a lesson learned from a 2004 Republican-supported “repatriation holiday.”
Capital-intensive industries like apparel will benefit more from the proposed legislation, Todd said; software less so.
In 2017, Intel spent $1,921,960 lobbying on corporate tax reform issues, "including lowering the corporate tax rate and international tax reform.” The company also paid lobbyists $150,000 to lobby on behalf of “issues related to corporate tax reform.”
Other Oregon companies have lobbied for changes to the federal corporate tax code.
Portland General Electric doled out $120,000 to lobby on a range of issues, including a Republican tax reform plan (separate from the current Republican tax overhaul) that would cut the corporate tax rate from 35% to 20%.
Merely simplifying the tax code would eliminate weeks of work wasted on taxes. Greenbrier Companies spent $50,000 in 2016, and $540,000 in 2015 on lobbying federal officials on a variety of issues, including “corporate tax simplification.”
Homebuilders have also intensified their lobbying efforts recently, Todd said, to capture proposed state and local tax deductions.
*Lobbying figures come from the Center for Responsive Politics and the U.S. Senate Lobbying Disclosure Database.
This article has been updated to reflect that Republicans delayed releasing legislation until Thursday.
Correction: This article has been amended to correct an editing error. PGE did not spend $120,000 lobbying for corporate tax reform. The money was spent lobbying on a range of issues, including a former version of the Republican tax plan.