June 12, 2014
A tax extension bill that could significantly impact Alabama farmers passed the U.S. House of Representatives earlier today in a 272-144 vote. Known as America's Small Business Tax Relief Act of 2014, HR 4457 would permanently extend the increased Section 179 small business expensing limitations that expired at the end of 2013.
Section 179 allows taxpayers to deduct the cost of new business property rather than depreciating it over time. Alabama Farmers Federation National Legislative Programs Director Mitt Walker said HR 4457 would help Alabama farmers.
“Farmers must continually upgrade and replace equipment, buildings and storage facilities in order for their farm business to stay profitable and competitive,” Walker said. “A permanent tax extension would allow farmers to reduce maintenance costs while becoming more energy efficient and productive. The approach taken by the House to permanently extend this important tax provision is preferred rather than simply extending the law for two more years, as the Senate’s version would do.”
The tax provision expired at the end of last year, reducing the maximum Section 179 deduction from $500,000 of purchased property to $25,000 for 2014.
Alabama’s congressional delegation members voting for the bill were U.S. Reps. Spencer Bachus, Robert Aderholt, Mike Rogers, Martha Roby and Bradley Byrne.
The Senate remains bogged down in passing a comprehensive two-year extension of tax provisions that expired last year due to a disagreement on amendments. A vote on the Senate floor is not likely to happen until later this year, leaving farmers and small-business owners in limbo.