Capito, Cornyn, Blackburn, Husted Introduce Bill to Unleash Domestic Investments for U.S. Companies

WASHINGTON, D.C. - Today, U.S. Senators Shelley Moore Capito (R-W.Va.), John Cornyn (R-Texas), Marsha Blackburn (R-Tenn.), and Jon Husted (R-Ohio) introduced the Ensuring Better Interest Treatment and Deductibility (EBITDA) Act. The legislation builds on the Working Families Tax Cuts Act's-also known as the One Big Beautiful Bill-pro-growth policy by restoring globally competitive interest deductibility standards and unleashing domestic investment for U.S.-headquartered companies. Companion legislation is being introduced in the U.S. House of Representatives by Representative Ron Estes (R-Kan.).

"U.S. based companies are at a disadvantage when competing in global markets for leveraged acquisitions, as foreign-headquartered rivals often benefit from more favorable interest deductibility rules and can therefore finance transactions more efficiently," Senator Capito said. "This bill will help ensure pro-growth policy by increasing globally competitive interest deductibility standards and will help unleash domestic investments for U.S. companies."

The legislation is supported by: the National Association of Manufacturers (NAM), U.S. Chamber of Commerce, Celanese, Asurion, Dell Technologies, Illinois Tool Works, and the American Chemistry Council.

"H.R. 1 was the investment of a generation in America's manufacturers. Thanks to the leadership of President Trump and this Congress, the U.S. tax code is now set up to drive manufacturing investment and job creation. A critical component of H.R. 1's pro-manufacturing agenda was the restoration of a pro-growth interest deductibility standard, a longtime NAM priority given debt financing's importance for capital-intensive sectors like manufacturing," Connor Rabb, Senior Director for Tax Policy for NAM, said. "The Ensuring Better Interest Treatment and Deductibility (EBITDA) Act from Sen. Capito and Rep. Estes would build on this progress, setting the stage for job-creating investments across the industry. Manufacturers strongly support the EBITDA Act, and we commend Sen. Capito and Rep. Estes for their leadership in making America the best place in the world to make things."

"The Ensuring Better Treatment and Deductibility Act is an important step toward preserving a competitive, pro-growth tax environment for American companies. Restoring a more balanced approach to interest deductibility - consistent with longstanding standards - will help businesses invest in long-term growth and compete globally. Asurion applauds Senators Capito, Cornyn, Blackburn, and Husted for introducing this important legislation," Asurion said.

"Dell Technologies supports the Ensuring Better Interest Treatment and Deductibility Act (EBITA) because it enhances financing flexibility for U.S. businesses. We appreciate Senator Capito, Representative Estes and their colleagues for working to advance this legislation," Tom Vallone, Senior Vice President of Taxes at Dell Technologies, said"

"Senator Capito's leadership recognizes that tax policy plays a critical role in U.S. competitiveness and in keeping the United States the world's most attractive place to invest and borrow. Modernizing Section 163(j) will help strengthen American competitiveness by lowering financing costs for capital-intensive manufacturers and encouraging more investment, innovation, and job creation here at home," the American Chemistry Council said.

BACKGROUND:

In July, President Trump signed into law the Working Families Tax Cuts Act, which provides major business tax benefits, including making the 20% Qualified Business Income (QBI) deduction permanent, restoring 100% bonus depreciation for investments, and increasing the Sec. 179 deduction cap to $2.5 million and increasing limits on business interest deductibility. Because of the hard work of President Trump and Congress, the U.S. tax code has finally put American businesses first and will help increase U.S. manufacturing. However, U.S. businesses are prevented from including global income (Subpart F income, GILTI inclusions, and Section 78 gross-up amounts) from their Adjusted Tax Income (ATI), which undercuts the restoration of the EBITDA standard. This anti-competitive provision shrinks the ATI base and reduces allowable interest deductions, even when such global income is fully subject to U.S. tax. This limitation undercuts the key pro-growth outcome in the Working Families Tax Cuts Act.

The Ensuring Better Interest Treatment and Deductibility Act (EBITDA) would build upon the pro-U.S. business policies in OBBB by repealing the ATI limitation exclusion of global income, allowing U.S. companies to remain competitive on the world stage.

Full text of the EBITDA Act can be found here.

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