Washington, D.C. — The U.S. House of Representatives Wednesday took action on a bill that has important ramifications for small and medium-sized business — including manufacturers. The “America’s Small Business Tax Relief Act of 2014” (HR 4457) would make permanent Section 179 of the IRS Tax Code and provide important tax relief to small U.S. companies.
Section 179 has been part of the tax code since 1958 when it was first enacted and only recently was allowed to expire this past December. For decades, this provision has provided businesses with the ability to deduct or expense the cost of certain qualifying property, rather than trying to recover such costs through depreciation deductions. It also dramatically raises the maximum amount a taxpayer may deduct for such property.
Extending the tax relief provided in Section 179 provides needed certainty to U.S. businesses on the tax treatment of critical investments, helping companies to plan for the future and make investment significantly easier. This type of investment and planning is the catalyst for economic growth, job creation and competitiveness. This legislation would allow small businesses to expense up to $500,000 in the year the expense was incurred.
“We hope to see this legislation enacted into law quickly,” IAPMO Vice President of Government Relations Dain Hansen stated. “Unfortunately, if our current tax law is not changed, small businesses will only be allowed to expense up to $25,000. Obviously, this bill, and change to current law, would greatly benefit many small businesses, and IAPMO members across the nation.”
The House Committee on Rules voted on the bill Wednesday afternoon clearing the way for the House to vote on it this week. IAPMO urges individuals to reach out to their representatives and express support for this legislation. Elected officials and their contact information may be accessed here.