WASHINGTON --- The Aerospace Industries Association today hailed congressional action on the American Jobs Creation Act of 2004 (H.R. 4520) as a critical step forward in providing manufacturing tax relief and in supporting fair market access for the nation’s export industries.
Last week a House-Senate conference committee reached final agreement on H.R. 4520 and the House of Representatives passed the bill Oct. 7 by a vote of 280 to 141. The Senate approved the measure Monday by a vote of 69 to 17 as Congress prepared to adjourn for the November elections.
AIA President and CEO John W. Douglass noted that the final version of the American Jobs Creation Act included two key provisions the aerospace industry urged Congress and the Administration to embrace:
--A manufacturing tax incentive for U.S.-incorporated companies to replace the export-dependent Foreign Sales Corporation/Extraterritorial Income (FSC/ETI) statute.
--A multi-year period for FSC/ETI beneficiaries to transition from the current to the new benefit.
“These reforms will make the U.S. tax code WTO compliant while ensuring it does not obstruct the ability of manufacturers to create jobs and plan long- term capital investments,” Douglass said.
In 2002 the World Trade Organization determined the FSC/ETI law was an illegal subsidy because it extended a partial income tax deduction only to exporters. The WTO’s action cleared the way for the European Union to impose incremental tariff penalties on a broad range of U.S. commodities and retail products beginning last March.
Douglass said the new tax incentive and the repeal of the FSC/ETI benefit will help the aerospace industry consolidate its position as the economy’s leading sector in maintaining a positive balance of trade.
Congressional Jobs Creation Act Will Enhance Aerospace Productivity and Trade