New York Times - Economy

How a Company Actually Plans to Spend Its Tax Cut Money

But regulatory permits for such a project, covering everything from land use to pollution, can take four years to materialize. Then, CalPortland has to buy and build the washers and crushers, which can take another year or so. By then, the House bill’s five-year window for immediate expensing will have closed.

“It takes businesses time to plan and time to envision and time to start building,” said Scott Greenberg, a senior analyst at the Tax Foundation, an independent group that typically finds tax cuts an economic boon. The foundation expects that making fast expensing permanent will stimulate growth. “When the provision expires,” Mr. Greenberg said, “the positive effects in the first years would go away.”

Another sticking point for CalPortland is that the tax bills tie the amount of interest that companies can deduct to a measure of their earnings. For now, the threshold is high enough that it wouldn’t affect the company’s borrowing — it finances much of its spending with debt because the tools it needs are so costly. But Mr. Regis said he is worried that introducing any limit opens the door to further restrictions down the line, or even bigger changes, especially if the Republicans lose control of Congress.

That is not to say the company won’t make some shorter-term use of the extra cash — most likely to buy concrete trucks to augment and eventually replace an older fleet in the Northwest. That would also mean hiring two dozen new drivers, but they would stay on in the long term only if orders remain strong.

That will be up to big builders like Turner Construction Company, one of its most voracious customers and a giant in the industry.

Turner is optimistic about the future, but not because of lower taxes. “On the list of 200 things we worry about, that would be No. 300 right now,” said Michael Kuntz, an executive vice president at Turner, which recently built the Wilshire Grand Hotel in Los Angeles — the tallest building west of the Mississippi. “It’s a nonissue for us.”

Construction is going gangbusters everywhere, Mr. Kuntz added, and the company already has billions in projects on its books for in 2018. “It doesn’t seem that the 35 percent corporate rate has held anyone back from building,” he said.

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