FUTURE OF SMALL BUSINESS TAX PROVISIONS STILL UNCLEAR
October 31, 2014
Alabama farmers continue to deal with the uncertain future of small business tax provisions as the end of the year draws closer.
Fifty-five tax provisions expired at the end of 2013, which returned the small business expensing limit for asset purchases to $25,000 for 2014. Previously, that limit was $500,000.
A bill to re-establish the increased expensing limit, commonly referred to as Section 179, has yet to pass the full U.S. Senate
“This is a big deal for farmers who are currently considering whether they should invest in new equipment or hold off on big purchases,” said Alabama Farmers Federation Director of National Legislative Programs Mitt Walker. “We’re hopeful this will be one of the issues addressed in the lame duck session when Congress returns after the Nov. 4 elections.”
Walker said continued inaction hurts farmers and the entire economy by suppressing small business investments.
The U.S. House of Representatives has twice passed bills this year to permanently set the limit at $500,000. This spring, the U.S. Senate Finance Committee approved a two-year extension of Section 179 at the 2013 level, but the bill has not been considered by the Senate.
The tax provision allows small business owners to deduct the cost of new business property rather than depreciating it over time.
- Sept. 18 - U.S. House passes H.R. 4, known as Jobs for America Act, a package of tax bills including a provision to permanently set the expensing limit at $500,000.
- June 12 - U.S. House passes H.R. 4457, known as America’s Small Business Tax Relief Act of 2014, to permanently extend the small business expensing limits in Section 179.
- April 28 - U.S. Senate Finance Committee approves S. 2260, known as the Expiring Provisions Improvement Reform And Efficiency (EXPIRE) Act, a package of tax bills including a two-year extension of the $500,000 expensing limit.