The Tax Cuts and Jobs Act has had an effect on many aspects of accounting. Here, Jeffrey D. Gilmore of Allegheny Performance Plastics provides his insight on the impact the new tax law is having on manufacturing.
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.
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.
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.
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.
Gilmore: Being a small manufacturer with limited staff, the adjustments that we make are driven and implemented by me.
Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of PICPA officers or members. The information contained in herein does not constitute accounting, legal, or professional advice. For professional advice, please engage or consult a qualified professional.