WASHINGTON – U.S. Senator John Cornyn (R-TX) joined Senator Shelley Moore Capito (R-WV), along with Senators Marsha Blackburn (R-TN) and Jon Husted (R-OH), in introducing the Ensuring Better Interest Treatment and Deductibility (EBITDA) Act, which would restore globally competitive interest deductibility standards and unleash domestic investment for U.S.-headquartered companies:

“Thanks to the historic Working Families Tax Cuts Act championed by President Trump, Republicans delivered a number of pro-growth provisions for hardworking Americans, including increasing limits on interest deductibility so businesses can reinvest in their employees,” said Sen. Cornyn. “This legislation builds on Republicans’ success by allowing U.S. businesses to account for their full global earnings when calculating their taxable income and interest deductibility to level the playing field, improve access to capital, and ensure American companies can compete in the global marketplace.”

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, 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, Senator Cornyn, and his colleagues in Congress, the U.S. tax code has put American businesses first and will help increase U.S. manufacturing. However, U.S. businesses are currently prevented from including global income from their Adjusted Tax Income (ATI), undercutting the restoration of the EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) standard. This shrinks the ATI base and reduces allowable interest deductions, even when such global income is fully subject to U.S. tax.

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