NEW YORK (ICIS)--A US border adjustment tax (BAT) would hit US chemical distributors particularly hard, the head of the National Association of Chemical Distributors (NACD) said on Monday.
“We have concerns about the BAT – this could be challenging for members that import,” said Eric Byer, president of the NACD.
“Many of our members import from China, Mexico and Europe, and sell primarily domestically [in the US],” he added.
While Republicans in the House of Representatives have proposed a tax plan that includes a BAT, its viability is in doubt amid opposition among Senate Republicans and Democrats, along with major business groups such as retailers and refiners.
A BAT in its purest form would exempt all export sales from tax, while not allowing imported raw materials and cost of goods sold to be deducted as an expense. This would give companies huge incentive to manufacture in the US to export, as well as discourage imports.
NACD would clearly prefer tax reform without a BAT. Lower taxes would free up more capital for small businesses to invest, Byer said.