The House Ways and Means Committee on Tuesday considered legislation introduced by Rep. Pat Tiberi (R-Ohio) that would make expensing of investments by small businesses permanent in the tax code.
Tiberi, a member of the House Ways and Means Committee, co-sponsored the bipartisan America’s Small Business Tax Relief Act with fellow committee member Rep. Ron Kind (D-Wis.).
Section 179 of the federal tax code allows small business owners to immediately deduct investments in equipment or property rather than depreciating the costs over time.
The America’s Small Business Tax Relief Act would make the current $500,000 maximum expensing limit permanent rather than lowering it to $25,000, which has been suggested.
“Making section 179 permanent at the $500,000 level would reduce compliance costs for small businesses, reduce the cost of capital and improve cash flow,” Tiberi said. “This would allow small businesses to invest in their businesses, expand and create jobs.”
Allowing the provision to expire, or offering temporary extensions, creates uncertainty that makes long-term planning difficult for small business owners, Tiberi said.
“I’ve heard from small business owners across Ohio who tell me one of their largest inhibiters to growth is uncertainty,” Tiberi previously said. “While small business owners across the country take advantage of section 179 small business expensing, the fluctuating rules surrounding the measure make it difficult to budget and plan. Rep. Kind and I believe that by making the rules permanent, small business owners will have the stability and predictability they need to grow, expand and create new jobs.”