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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