12/08/2005
CONTACT: Michael Donohue, (202) 554-9000
WASHINGTON, D.C. -- The National Federation of Independent Business, the nation's largest small-business advocacy group, today praised passage of tax-cut legislation in the U.S. House of Representatives containing badly needed provisions for the nation's small firms. The bill, H.R. 4297, the Tax Relief Extension Reconciliation Act of 2005, was a "key vote" for NFIB members and passed the House 234-197.
"The House's vote to extend tax relief is a victory for Main Street job creators," said NFIB Executive Vice President Dan Danner. "The pro-small-business tax cuts of 2003 put money back into the hands of small-business owners to hire new employees and have put money directly into the economy as owners have purchased new equipment and grown their businesses. That's why the vote to extend these pro-growth tax cuts was so vital. With two-thirds of all new jobs being created by small business, Congress must do everything possible to help small-business owners succeed, and maintaining the current levels for Section 179 expensing and faster depreciation schedules will help keep the nation's economy strong."
H.R. 4297 included provisions for a two-year extension for Section 179 expensing, for accelerated depreciation for leasehold properties and restaurants, and to extend other tax reductions contained in the Jobs and Growth Act of 2003. The 2003 tax relief increased from $25,000 to $100,000 the amount of new investment a business can expense in a given year. The law also increased from $200,000 to $400,000 the amount of total investment a business can make in a year and still qualify for expensing under Section 179.
According to NFIB's November 2005 Small Business Economic Trends Report, 61 percent of small-business owners reported capital outlays over the past six months. Extending a small-business owner's ability to immediately expense critical investments has proven to be a key component of our economic recovery and continued expansion.
Also of help to small-business owners are the 15-year depreciation periods for restaurants and leasehold improvements included in H.R. 4297. If not addressed, the depreciation schedule for both will revert to 39 years in 2006. Continuing to allow owners to depreciate improvements more quickly will ensure that the growth of small businesses is not unduly hampered.
As an NFIB Key Vote, the roll call tally on the Tax Relief Extension Reconciliation Act of 2005 will be sent to all 600,000 NFIB members as part of the group's How Congress Voted scorebook just before the 2006 elections.
