With Curb on Interest Tax Break, Companies Strategize on Debt

New interest-deductibility limits are expected to hit companies that are highly leveraged or capital-intensive

Last year’s tax-code overhaul slashed the rates companies pay, but limited an important break-—the deductibility of interest payments. Now, companies are exploring ways to sidestep that change and billions of dollars in tax each year.

Before the new law, corporate interest payments were generally deductible. Starting this year, companies can only deduct interest payments up to 30% of their adjusted income.

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