NFIB

February 8, 2008

On Feb., the House and Senate passed H.R. 5140, a $168 billion economic stimulus package. The president is expected to sign the bill into law next week.

NFIB's action

• To underscore the importance of H.R. 5140 for small business, the House and Senate votes were considered key votes by NFIB.
• NFIB worked with key members of Congress and the administration to make sure small-business interests were protected when H.R. 5140 was drafted.
• NFIB was successful in securing the inclusion of a key small-business provision (explained below) in the original House bill.
• NFIB's diligence paid off as this provision was preserved in the final bill sent to the president's desk.
• Jim Barnard, CFO of Barnard Manufacturing and a 10-year NFIB member, was chosen to attend the State of the Union address as a representative of small business.
• "Michigan's economy has certainly seen better days, and we could use a boost from Washington that gives companies like mine the chance to invest in our business and, more importantly, put more people to work," Barnard said. "I know a number of small-business owners who are grateful the president is focusing a large part of his economic stimulus plan on small business, and I am excited to be their eyes and ears tonight during his address to Congress."
• NFIB's efforts were also recognized in the national publication Congress Daily.
• “Small business, which can already write off up to $125,000 of purchases immediately, would see that number temporarily doubled to $250,000. That would represent a huge victory for the National Federation of Independent Business, which sought the change.”

How does H.R. 5140 help small business?

• The economic stimulus package doubles the current small-business expensing limit to $250,000 from $125,000.
• This provides small-business owners with an immediate deduction for the entire cost of certain investments made in their business, such as purchasing new equipment.
• This applies only to small-business owners who invest less than $800,000 in their business this year.
• NFIB has long supported immediate expensing as an incentive for owners to make investments in their businesses and hire new employees.
• The economic stimulus package also provides for a 50-percent bonus depreciation for certain investments in business.
• This means a business can take an immediate deduction of 50-percent of the investment, rather than deducting the value over a number of years.
• Unlike expensing, the bonus depreciation deduction would apply to investments that exceed the $800,000 limit.
• Both of these provisions put money back in the hands of small-business owners so that they can grow their businesses this year.
• These targeted stimulus provisions will be a great help to keep small businesses growing and to assist the millions of small-business employees faced with slowing economic growth.
• The package also provides tax rebates of $600 (individuals) to $1200 (married couples), and $300 per child. The rebates phase out for individuals with incomes over $75,000 and couples with incomes over $150,000.
• The rebate checks will most likely be sent out in May.