The National Federation of Independent Business on Friday applauded the U.S. House for passing America’s Small Business Tax Relief Act of 2015.
The bill restores to $500,000 the amount that small businesses can deduct in expenses during the tax year. The limit had dropped to $25,000 when the American Taxpayer Relief Act of 2012 expired on January 1, 2015.
According to NFIB: “Business expensing (Section 179 in the tax code) allows small businesses to immediately deduct the full value of investments in equipment in the year that the investment is made, instead of depreciating the investments over time.”
An NFIB Research Foundation study indicates that permanently setting the section 179 limit at $500,000 could add 200,000 jobs and $18 billion to the economy over a 10-year-period.
In fact, President Obama’s proposed budget would permanently increase the limit, setting it at $500,000 for 2015, increasing it to $1 million in 2016, and according to inflation in subsequent years.
“To help small businesses, higher limits and the inclusion of real property improvements should be made permanent,” NFIB argued in a statement. “This will allow small businesses to plan for the future and expense additional investments, and therefore, enable those businesses to expand and create new jobs.”
In a statement, NFIB Manager of Legislative Affairs Matt Turkstra said, “NFIB applauds members of the House for taking the first step in fixing this small business tax priority – voting to pass bipartisan legislation that benefits both Main Street businesses and the communities in which they reside. We urge the Senate and the President to pass this legislation now – and not keep America’s job creators in limbo while they hope for another eleventh-hour deal.”
Turkstra added: “Making this tax provision permanent would encourage business owners to purchase everything from tractors to pizza ovens, creating a ripple effect through the local community. It also allows business owners to better run their business by eliminating a major uncertainty in tax preparation and planning. This bipartisan legislation is a win for all sides.”