Rep. Pat Tiberi (R-Ohio) recently introduced legislation that would extend 50 percent bonus depreciation for small business owners to help promote economic growth and job creation.
Under the bill, business owners would permanently be allowed to deduct half of all new equipment purchases immediately. Since it was first enacted in 2002, 50 percent bonus depreciation has been increased, extended and allowed to lapse a number of times.
“I’ve heard time and again from small business owners in Ohio that extending bonus depreciation is the single biggest factor in allowing their businesses to grow,” Tiberi, the chairman of the House Ways and Means Subcommittee on Select Revenue Measures, said. “Allowing companies to use these tools for capital reinvestment is a commonsense way to encourage job creation.”
The measure would also lift a number of restrictions on corporate alternative minimum tax credits to allow them to be used for capital reinvestment. The provision would benefit companies that operate at a loss and have limited ability to use bonus depreciation.
The definition of “qualifying property” would also be expanded to include retail improvements if the bill were signed into law. The change would allow retailers who own their businesses to make more frequent interior renovations, since bonus deprecation traditionally applies to retailers who lease their spaces.
Making bonus expensing permanent would create 212,000 jobs, increase gross domestic product and grow federal tax revenues, according to a Tax Foundation report.