By William J. Hayes, managing editor, Pennsylvania CPA Journal
The Tax Cuts and Jobs Act’s effect on many aspects of accounting has been wide-ranging. (See PICPA’s Federal Tax Reform Guide presented by the Pennsylvania CPA Journal.) To find out more about how those holding accounting positions in industry were adjusting to the legislation, we reached out to Jeffrey D. Gilmore, vice president of finance for Allegheny Performance Plastics LLC in Leetsdale, Pa. Gilmore is a member of the PICPA Corporate Finance Cabinet. He gave us his insight on the impact the new tax law is having on manufacturing.
PICPA: You are vice president of finance for a manufacturer. Have you seen any aspects of the Tax Cuts and Jobs Act that you think could have a particular impact?
Gilmore: The revision of Section 163(j) that addresses limitations on interest deductibility has excluded floor-plan financing from the cap of 30 percent. Floor-plan financing will benefit auto manufacturers, which are a large part of our industry customer base.
PICPA: In your role, how do you stay up to date on large tax law changes such as this, and does your company look to you to be the go-to resource for the company?
Gilmore: As vice president of finance, I am responsible to be the direct liaison with our outside tax firm. While they are the tax experts, I have a much deeper understanding of our business, processes, capital needs, and customer base. So, my goal is to understand items in the new law that impact our business, then interact with the outside tax firm and the owners to clarify the effects and create the strategy. It really is a team effort to digest the impact and contemplate a correct course.
PICPA: How much would you say the changes in taxes since reform are affecting your company right now? Or do you think the biggest effects will be felt down the road?
Gilmore: Some changes impact us now, and others will affect us in the future. Locking in the five-year period and including used equipment in accelerated depreciation helps in the capital planning process, which impacts us now. The biggest future item to address is with the significant reduction in the corporate tax rates should we change our structure to a C corporation.
PICPA: Do you take steps with your staff to be prepared for major changes such as this? Is it largely departmental adjustments that need to be made, or does it involve the entire company?
Gilmore: Being a small manufacturer with limited staff, the adjustments that we make are driven and implemented by me.