Rep. Tom Reed (R-N.Y.) said on Thursday that the recent House passage of America’s Small Business Tax Relief Act would provide job creators with certainty and control over their finances.
Reed co-sponsored the bill, which would make small business expensing under section 179 of the federal tax code permanent in an effort to create stability and growth for small businesses.
“Small businesses and farmers need to know the tax landscape so that they can make investments in equipment and employees,” Reed said. “They deserve the freedom and flexibility to immediately deduct the cost of new equipment and technology upgrades so they can better manage cash flow and make investments in new jobs that otherwise might have been put on hold.”
Section 179 of the federal tax code allows business owners and farmers to immediately deduct investments in computers, software, property and equipment rather than depreciating those costs over time. From 2010 to 2013, the expensing limit was $500,000. The limit was dropped to $25,000 for tax years after 2013.
America’s Small Business Tax Relief Act, which was introduced by Rep. Pat Tiberi (R-Ohio), would permanently set expensing limits at the 2013 level.
“When Washington keeps small businesses and farmers guessing year after year what the tax landscape will look like, it’s harder for them to plan, invest and hire,” Reed said. “Making this pro-jobs, pro-growth policy permanent is fair to small businesses which suffer when tax policies are extended for only one or two years at a time.”