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Ways & Means Committee Addresses Expensing and Other Small Business Tax Issues

Date: April 28, 2014

House Ways & Means Chairman Dave Camp (MI-04) has taken a step towards giving small business owners greater tax certainty by addressing expired tax provisions, including small business expensing, that are important to small business owners.

On April 29, the Committee marked up H.R. 4453, which would make permanent the 5-year recognition period for built-in gains.

NFIB's support for these provisions is outlined below:

179 Expensing

  • Permanently extending increased expensing levels under section 179 addresses a core concern for small business owners:  simplifying the tax code and reducing complexity.
  • Expensing provides the majority of small business owners with an immediate deduction for investments that help businesses grow, which significantly improves cash flow. 
  • Because small business expensing levels have only been increased on a temporary basis, at the beginning of this year they returned to only $25,000 for 2014. 
  • Unless Congress acts, these lower expensing levels mean that only 30 percent of NFIB members will receive the full benefit of business expensing in 2014.

BIG

  • The reduced recognition period for S corporation built-in gains is another expired tax provision that helps the small business community.
  • Unless Congress acts, many S corporations will have to wait 10 years to access certain capital assets.
  • Locking up a company’s capital for an entire decade is simply too long and has a negative effect on cash flow—the life blood of small businesses.  


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