Talking Taxes: The Good, the Bad, and the Ugly

The ACD Washington Fly-In is rapidly approaching, and taxes will be a primary focus for the 2025 event. Tax policy remains a major priority for ACD and our members throughout the year, and in D.C., taxes are one of the top issues the Trump Administration and 119^th Congress are engaged in. When it comes to specific areas, it spans a full spectrum of the good, the bad, and the ugly.

Let’s start with the good. Small businesses are the backbone of the U.S. economy, driving job creation and local investment. The vast majority of ACD members are small businesses – our average member has about 28 employees and generates around $42 million in sales annually. The 20% Small Business Tax Deduction was established under the 2017 Tax Cuts and Jobs Act (TCJA). It has empowered millions of small business owners to expand, hire employees, and increase wages. The good news is that Congress has this important issue on its radar. The Main Street Certainty Act, which would make the deduction permanent, has been introduced in both the House and the Senate. It’s critical for so many of our members – and countless other small businesses across the nation – to remain competitive. As Congress debates how to extend the TCJA, making the 20% Small Business Tax Deduction permanent should be a core part of any bill.

And now, for the bad. Congress reinstated the Superfund tax on certain chemicals and chemical substances by enacting the Infrastructure Investments and Jobs Act in 2021 and reinstated the tax on crude oil and petroleum products through the Inflation Reduction Act of 2022. This tax raised the cost of many goods for consumers because many taxed chemicals and chemical substances are essential to everyday consumer products. Additionally, compliance with the newly reinstated tax has created a substantial regulatory burden for many chemical distribution supply chain companies. ACD supports legislation to repeal the Superfund Excise Tax on chemical substances. As Congress considers new tax legislation, ACD and our members are urging the inclusion of this tax’s repeal.

And finally, the ugly. Tariffs. We know they are being used with the intention of improving the United States’ economic prospects and security concerns. Thankfully, we’ve gotten a recent reprieve from President Trump, who paused the reciprocal tariffs for 90-days and exempted products compliant with the U.S.-Mexico-Canada Agreement from other duties.  ACD will continue working with the White House and other Administration officials to consider exemptions for chemical products from any tariffs implemented and to bring greater certainty to our members. It’s critical that the Administration recognize that the U.S. market relies on access to high-quality raw materials sourced overseas to advance domestic manufacturing.

ACD members can help advocate on all these critical issues:

• Sign up to join us at the ACD Washington Fly-In, May 14-15.
• Signal your support for making the 20% Small Business Tax Deduction permanent using National Federation of Independent Business’s Advocacy Action tool here.
• Join the call for repealing the Superfund Tax with ACD’s Action Alert.
• Contact ACD to share information on the chemical products you import. This will help us ensure the Administration understands how important and impactful these substances are to our society and our economy.

Together, we can make a real difference in how tax policies impact the chemical distribution industry. Join us!