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Regulations and renewal mark fast start to 2016

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The wood industry has lobbied hard to extend a tax provision for new machinery and other capital improvement purchases. It’s become an annual ritual, usually decided with a one-year extension at the eleventh hour.

Congress extended it indefinitely in December when the U.S. Senate joined the House in approving a $622 billion tax reform bill, which makes permanent higher limits for direct expensing and tax credits for research and development programs. Direct-expensing allowance and purchase cap limits are now set at $500,000 and $2 million, respectively. Without the extension, these limits would have reverted to pre-2003 levels of $25,000 and $200,000.

“It is good to see that both parties and both sides of Congress can work together to help small business and manufacturers — the backbone of the American economy — with long-term investment in new technology and growth,” Wood Machinery Manufacturers Association president Jamison Scott said in a statement. “Finally our members can properly plan investing in their own businesses while at the same time hoping their customers will do the same.”

This month’s Pro Shop column (on Page 28) explores the extension in more detail.

In other legislative news, the U.S. Environmental Protection Agency is expected to unveil its final Formaldehyde Standards for Composite Wood Products Act in May. The long-awaited regulation on formaldehyde emissions from composite wood products has been in the works for nearly three years.

The rule will apply to entities that manufacture, import, fabricate, distribute or sell composite wood products. The EPA estimates it will impact nearly 900,000 businesses.

The Federal Wood Industry Coalition — which includes the Composite Panel Association, Business and Institutional Furniture Manufacturers Association, Kitchen Cabinet Manufacturers Association, Association of Woodworking and Furnishings Suppliers and WMMA — wants the EPA to adopt the rule created by the California Air Resources Board standard that regulates emissions from particleboard, MDF and hardwood plywood.

“It remains unclear whether the EPA will do that or tack on some new rules of its own such as separate emission standards for composite wood components, new testing procedures and separate emission requirements for laminated products,” the WMMA says.

We’ll keep you posted. In the meantime, it is time to start making plans to attend the International Woodworking Fair, slated for Aug. 24-27 in Atlanta. Online registration is available at, which offers an early-bird ticket discount and special rates on hotel rooms. This is one-stop shopping at its best.

And what better way to start a new year than with some good news about the economy. New construction on single-family family homes reached a seven-year high last November, according to data from the U.S. Department of Housing and Urban Development and the Commerce Department.

“Single-family production … has reached levels last seen before the Great Recession, an indicator that we are making gradual headway back to a normal housing market,” says David Crow, chief economist for the National Association of Home Builders. “As we close out the year, we can see that the housing sector has made headway in 2015 and we expect the recovery to continue at a modest pace.” 

This article originally appeared in the February 2016 issue.

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