Senators Collins, Casey Introduce Bill To Help Small Businesses Grow, Create Jobs
WASHINGTON, D.C.—U.S. Senators Susan Collins (R-Maine) and Bob Casey (D-Pennsylvania) introduced bipartisan legislation that would allow small businesses to plan for capital investments that are vital to expansion and job creation. This bill would ease complex accounting rules for the smallest businesses; and, it reduces the tax burden on new ventures.
The Small Business Tax Certainty and Growth Act would provide small businesses with the certainty they need to make long-range investment plans by making permanent the maximum allowable deduction under Section 179 of the Internal Revenue Code. Section 179 allows small businesses to more rapidly deduct the cost of acquired assets. The amount of the maximum allowable deduction has changed three times in the past six years, and is usually addressed as a year-end “extender,” making this tax benefit unpredictable from year to year, and therefore difficult for small businesses to take full advantage of in their long-range planning. This bill would permanently set the maximum allowable deduction at $250,000, indexed for inflation, and ensure that only small businesses can avail themselves of the benefit by phasing it out as acquisitions exceed $800,000. The bill further encourages capital investment by extending, for one year, provisions that benefit businesses of all sizes: “bonus depreciation” and 15-year depreciation for improvements with respect to restaurants, retail facilities and leaseholds.
The bill also allows more companies to use the simpler cash method of accounting by permanently doubling the threshold at which the accrual method is required, from $5 million in gross receipts to $10 million, indexed for inflation. The bill also expands the ability to use more simplified methods of accounting for inventories, reducing complexity for small businesses that produce goods.
Finally, the bill would permanently double the deduction for business start-up expenses from $5,000 to $10,000. This would help ease the tax burden on new businesses. This provision is targeted to provide a benefit only to small businesses by phasing out the deduction as start-up expenses exceed $60,000.
“Small businesses are our nation’s job creators, and recent studies by the National Federation of Independent Business show that taxes are the number one concern of small business owners, and that constant change in the tax code is among their chief concerns,” said Senator Collins. “Our bill would make a real difference in our nation’s small businesses’ ability to survive, thrive, and continue creating good jobs.”
“My top priority continues to be job creation, and this measure is a common-sense step to incentivize small businesses to hire,” said Senator Casey. “Passing these measures will help create jobs and boost economic growth across the country. Helping small businesses expand and fueling the economy is something both Republicans and Democrats should support.”
