Fate uncertain due to disagreements with Senate, Obama Administration
The House of Representatives voted on Thursday to make permanent a tax provision that would allow small businesses to write off up to $500,000 in new equipment purchases, and some improvements to real property, instead of depreciating the costs over time. This change to section 179 of the tax code, which overwhelmingly passed the House on a 272-144 vote, would prevent the expensing level to fall all the way to $25,000 in 2014, after being at $500,000 from 2010 through 2013. It also indexes the level to inflation. The issue is a major concern for small businesses, with more than 150 business groups sending a letter urging them to back the legislation. In addition, the House also passed a bill that eases the tax burden on companies that change from taxable C-corporate status to S-Corporate status.
What It Means Going Forward:
The two bills are tied up in a debate over the handling of numerous tax provisions that expired at the end of 2013. While the Senate Finance Committee approved a measure that extends the bulk of these so-called tax extenders through the end of 2015, the measure has not been considered on the Senate floor due to procedural disagreements between Republicans and Democrats. The different approaches between the House and Senate are likely to complicate the ultimate enactment of these expired provisions. In addition, the Obama Administration announced its opposition to both measures that passed the House, saying that the Administration preferred to only extend these provisions for two years.
But NFIB praised the House vote and called for permanent relief, saying “Making this popular and effective tax provision permanent will help small businesses streamline recordkeeping, invest in their business and purchase equipment or other business improvements from their local community. Members of Congress often say they want to help small business—well, this is a way to help right now. We thank those members that followed through when it counts and actually voted for small business.”
This news article is intended to keep small business owners apprised of current events that may affect them. It does not necessarily reflect NFIB’s policy position on such issues.