Tougher Interest Deduction Sets Off Hunt for Year-End Relief

A newly tightened cap on interest deductions is jacking up corporate tax bills this year, but companies are fighting to get the cap loosened by year’s end.

The method by which companies calculate their interest deductions got stricter as of Jan. 1, making more of their interest costs taxable and leading some companies to pay tens of millions of dollars more in added taxes.

The tighter cap is “definitely on the minds of companies,” said Anne Gordon, vice president for international tax policy at the National Foreign Trade Council.

Companies have been unsuccessful this far in their attempts ...