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Making Expensing Provision Permanent Provides Predictability

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Washington, April 10, 2014 | comments

U.S. Congressman Pat Tiberi (R-OH) and U.S. Congressman Ron Kind (D-WI) today introduced, H.R. 4457, the Section 179 Permanency Act, a bill to help create stability for small businesses leading to their growth and expansion by making permanent small business expensing outlined in Section 179 of the tax code.


“I’ve heard from small business owners across Ohio who tell me one of their largest inhibiters to growth is uncertainty,” said Congressman Tiberi, chairman of the Ways and Means Subcommittee on Select Revenue Measures.  “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. Representative 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.”


“Employers want and deserve stability and predictability when it comes to tax planning,” said Rep. Kind. “This commonsense legislation will help small businesses meet their long-term financial goals, so they can continue to grow and hire new workers in Wisconsin and around the nation.”


The small business expensing rules outlined in Section 179 of the tax code allow small business owners to immediately deduct the cost of investments in property, equipment, and computer software rather than depreciating such costs over time. This gives owners flexibility to reinvest in their business and simplifies their accounting practices. 


“Small business expensing-sometimes called Section 179-is very important to small businesses owners," said National Federation of Independent Business President and CEO Dan Danner. "By allowing small businesses to immediately deduct the cost of new equipment, tax compliance is simplified and capital is freed up to invest in their businesses. We applaud Congressmen Tiberi and Kind for introducing this much needed legislation to make small business expensing permanent, predictable, and adequate for the needs of small businesses - and call on all Members of Congress to support this common-sense legislation.”


Over the years the deduction limit has varied; this year it dropped to $25,000 of qualifying property. The Tiberi-Kind bill would make permanent the levels effective during the 2010-2013 tax years allowing taxpayers to expense up to $500,000 of investments in new equipment and property, with the deduction phased out after investments exceed $2 million. Other provisions in the bill include:

·       Adjustments for inflation.

·       The repeal of the exclusion of air-conditioning and heating units from qualified expenses.

·       The repeal of $250,000 limit on real property qualifying for expensing.

Original cosponsors include Congressmen Jim Gerlach (R-PA), Richard Neal (D-MA),  Todd Young (R-IN), Danny Davis (R-IL), and Aaron Schock (R-IL).

Congressman Jim Gerlach (PA-06) added: "When small businesses and start-ups succeed, everyone benefits from the innovation, jobs and opportunity generated by their success. This legislation hopefully will put success within reach for more businesses by encouraging investments needed to launch a new company or expand an existing one. Making Section 179 expense deductions permanent and increasing their limits was part of the America's Small Business Tax Relief Act that I had first introduced in 2012, and I'm thrilled to be working with my colleagues on the Ways & Means Committee to send this measure to the president's desk."



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