FEDA Presentation Focuses on Taxes, Tariffs and EPR Laws

Although the push to pass the reconciliation bill may now be over, there’s still a lot of work happening on the legislative and regulatory fronts to fully understand how businesses can maximize the bill’s tax relief provisions and continue to promote pro-business policies in other areas.

Brian Wild, chief government relations officer at the National Association of Wholesaler-Distributors (NAW), provided an update on those efforts to the FEDA Legislative and Regulatory Affairs Council earlier this month. On the reconciliation bill, Wild touted the decision to make several key tax provisions permanent, including the 20 percent pass-through deduction for small and family-owned businesses. One possibly overlooked benefit of the bill is the 100 percent bonus depreciation for factories, Wild noted. Distributors could end up benefiting from this provision as NAW is working to have facilities where value added activities, such as white labeling products or light assembly, classified as a factory so that they may use the depreciation. “This is a debate that's going to happen in Treasury and it's going to be a while before we have that answer,” Wild said. “But we're going to make that argument that wholesaler distributors should be included in that bonus depreciation.”

While distributors and manufacturers secured important tax benefits in the reconciliation bill, Wild acknowledged the challenges stemming from the uncertainty over tariffs. Because the Trump administration has used a combination of executive orders and national emergency declarations as the basis for the tariffs, organizations and business advocacy groups have seen some success in claiming the president overstepped his authority, enabling them to advance legal challenges. Even in those instances where trade partners have announced a new deal with the United States, Wild pointed out that only Congress has the actual authority to approve trade agreements. As a result, the deals so far lack complete rules and details and are closer to a gentleman’s agreement in nature, he said.

Finally, Wild discussed the emergence of extended producer responsibility (EPR) laws, a new kind of legislation that attempts to place the costs of recycling on distributors and other companies classified as producers. Oregon recently became the first state to implement an EPR law and others are set to follow. “What had happened is we, NAW, and others didn't participate in the writing of the EPR laws in a bunch of states and the big retailers and big producers did participate,” he said during the presentation. “They shifted the responsibility of creating plastics and paper products and so on from the manufacturer and the consumer and they put it on us in that middle space.”

Wild discussed how the NAW is working to oppose EPR laws and its belief that the Oregon version violates state law because it delegates taxation to a private entity: the producer responsibility organization tasked with collecting fees from producers. He said NAW is considering legal challenges and encouraged FEDA members to share their experiences with EPR laws with the NAW team. Those interested may reach Wild at bwild@naw.org.