01/18/2008
NFIB is leading efforts to ensure that small business incentives are included in any economic stimulus plan. On Friday, President Bush outlined principles to help the economy with approximately $145 billion in tax incentives. In particular, the President stressed the importance of helping small business.
NFIB is working with legislators on the Hill to make sure that the package contains provisions designed to spur small-business investment during what is expected to be a period of slowed economic growth. Incentives to help small-business owners continue to grow their business are critical to the livelihood of the country's No. 1 job creator.
NFIB supports the following provisions:
Increasing the dollar amount of small-business expensing and expanding its uses:
NFIB supports increasing expensing levels to allow small-business owners to immediately write off necessary purchases and spur investment. This provision will help small-business owners make new investments in their business.
Standard home office deduction:
Of the 17.3 million small businesses, 9 million are home offices, which incur expenses that would be easily deductible if they were not located in the home. Additionally, many business owners do not take advantage of the current home office deduction because of the complexity of the paperwork.
NFIB supports allowing a $2,500 standard deduction for home-based businesses. Helping the smallest businesses claim the deduction would leave the small-business owner with more time and money to operate and grow the business.
Fifteen-year recovery for retail improvement, restaurant and leasehold property, including new construction:
A 15-year depreciation period better reflects the use of these properties, and including new construction would allow improvements made by employers who own their own buildings. All of these provisions would allow small-business owners to improve their company and would assist the construction industry as well.
Fifty percent depreciation for the first year in service:
Bonus depreciation is an incentive for businesses to invest in their businesses now, providing an immediate deduction for half the cost of the investment rather than deducting the cost over a number of years.
Extend the net operating loss carryback:
This provision would allow a taxpayer to smooth out loss years with gain years. As the economy slows and businesses see more losses, this extension will allow them to account for the losses in years while the economy is slowing during years when the economy was growing.
While small businesses created 66,000 jobs in December, recent NFIB-conducted surveys show small-business owners' confidence in the economy has declined. This targeted stimulus would help boost that confidence ensuring that small businesses continue to grow and create jobs. Congress and the Administration are expected to move quickly on this stimulus, so stay tuned to NFIB.com for continuing coverage.
