U.S. Congressmen Pat Tiberi (R-OH) and John Larson (D-CT) introduced the American Job Creation and investment Act, H.R. 3123, a bill that would enable businesses to access capital, invest in new facilities and equipment and create American jobs.
"This bill is a commonsense measure that gives American businesses the option to put more of their money from credits earned because of overpaid taxes into investments that will allow them to grow, expand and hire," said Congressman Tiberi, Chairman of the Ways and Means Subcommittee on Select Revenue Measures. "Currently employers' limited ability to access capital for new investments continues to be a significant barrier to recovery and growth. This bill would give those companies badly needed tools to better access their already existing Alternative Minimum Tax (AMT) credits in exchange for making investments in their companies, instead of exchanging them in the future to offset their tax liability."
"Spurring job creation and economic growth remains my top priority in Congress and that is why I'm pleased to introduce this bill with my friend from Ohio, Pat Tiberi," said Congressman John Larson. "The American Job Creation and Investment Act would allow struggling businesses to access much needed capital in order to expand their operations and hire additional employees by giving them access to their pre-paid AMT credits. By getting capital flowing again, I believe this legislation can help get our nation on a path to recovery."
Given that struggling businesses that pay the corporate AMT are unable to take advantage of most existing business tax incentives, this bill would simply bring a job creating tax incentive to employers subject to the AMT -- including manufacturers, energy companies, airlines, and high-tech companies. Specifically, the bill would enable employers to use more of their existing corporate AMT credits to create jobs and for capital investments for 2011 and 2012 instead of exchanging them in the future to offset their tax liability. Corporate AMT credits are pre-payments, worth billions of dollars, by businesses to offset their future tax liabilities.
The American Job Creation and Investment Act would modify limitations to allow companies to use more corporate AMT credits for activities which would otherwise qualify for bonus depreciation. Specifically the bill would:
* Remove the $30 million cap and raise the six percent of pre-2006 AMT credits cap to 50 percent.
* Make all pre-2011 AMT credits eligible for the provision versus pre-2006 credits.
* Allow qualified investments made by partnerships that a corporation owns greater than 50 percent to qualify for the provision.
* Allow companies to make separate elections for each taxable year on bonus depreciation or corporate AMT credits in lieu of bonus depreciation.
This bill is supported by groups ranging from the U.S. Chamber of Commerce, the National Association of Manufacturers, and Associated Builders and Contractors to companies like Goodyear, Delta Airlines, and Xerox.