04/ 02/ 2008
Expanded expense limits and bonus depreciation key victories for small business
NFIB and its members were front and center in more ways than one during the debates leading up to the recent passage of an economic stimulus bill.
In a major victory for NFIB, President Bush signed legislation authorizing a stimulus package that includes important tax breaks for small businesses, and nine NFIB members were at the White House for the ceremony.
And when the president, in his January State of the Union message, called for Congress to pass an economic stimulus bill, Jim Barnard, chief financial officer of Barnard Manufacturing, a production machine shop located in St. Johns, Mich., was watching the address from the first lady's box at the U.S. Capitol.
One of the reasons for the attention was that NFIB was the only group lobbying for one of the most important provisions included in the stimulus package: doubling the dollar amount for small business expensing limits from $125,000 to $250,000.
This provision will allow small business owners to immediately write off business purchases and will help them expand their businesses and hire new employees.
Another key provision included in the package is a 50 percent bonus depreciation deduction. This proposal provides an additional one-year depreciation deduction of 50 percent of the value of the property purchased by a small business. Bonus depreciation is an incentive for business owners to invest in their businesses now, providing an immediate deduction for half the cost of the investment. Both the provision raising expensing limits and the bonus depreciation deduction expire at the end of 2008.
"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 says.
"This was an important legislative victory for NFIB and all small business owners," says Dan Danner, executive vice president of NFIB. "As soon as the stimulus package was signed into law, small business owners could make plans to invest in their businesses, knowing that they qualify for these tax breaks."
"The stimulus plan gives us the confidence to expand our facilities immediately," says Bob McCutcheon, owner of McCutcheon Apple Products in Frederick, Md., who attended the bill signing ceremony. "With these tax incentives, our business can move forward quickly with plans to invest in new equipment and hire new workers."
McCutcheon was also interviewed by The New York Times for a story headlined "With the Stimulus Package, the Big Winner Could Be Small Business." The article appeared the same day as the signing ceremony.
This article is from the April/May 2008 issue of MyBusiness.
