Dear Representative:
On behalf of the National Federation of Independent Business, the nation’s leading small business advocacy group, we urge you to take quick action on a one-year fix for the Alternative Minimum Tax. While considering H.R. 3996, the Temporary Tax Relief Act of 2007, we ask you to consider not offsetting the fix with additional tax increases.
Tax complexity and compliance is a major challenge to small-business owners, so acting quickly to ensure a one-year patch for the AMT is especially important. We are concerned that further delays will impact the ability of the Internal Revenue Service to prepare for the upcoming filing season. As Treasury Secretary Henry Paulson and Acting IRS Commissioner Linda Stiff have noted, delays could impact 50 million taxpayers and $75 billion in refunds could be delayed if Congress does not act soon.
We are concerned that the burden could be especially hard on small-business owners. Adding the additional complexity of unknown tax laws for 2007 filings does nothing to improve the tax compliance of small-business owners. Delayed refunds could also cause additional problems for many small - business owners who face cash flow challenges and rely heavily on a regular cash flow to run their businesses.
In addition to patching the AMT, we appreciate that the 15 year depreciation period for improvements to restaurant and leasehold properties is included as an extender in H.R. 3996. Our membership includes many restaurant owners and this shortened depreciation period provides many of these business owners with the opportunity to make necessary improvements to their businesses. Because restaurants are traditionally opened longer hours and more days per week than other businesses, the 15 year period is a more suitable schedule.
As Congress considers this bill, we urge you to consider the impact that certain tax changes could have on our members and to not pay for the bill by increasing other taxes. While providing relief for many of our members by patching the AMT is vital, paying for it with a tax increase is counterproductive.
The AMT was never expected to impact many of the taxpayers facing this tax today and therefore anticipated revenue generated by the tax is unintended. While the tax and the revenue may be unintended, any tax increases used to pay for the patch are very real. Again, we urge you to take quick action on this important issue and keep in mind that tax relief for some should not be paid for with increases on other taxpayers.
Sincerely
Dan Danner
Executive Vice President
Public Policy and Political
