WASHINGTON D.C. - U.S. Congressmen Dan Boren, Vito Fossella (R-NY13), and Wally Herger (R-CA2) today unveiled bipartisan legislation to encourage small employers to expand and grow their operations, spur investment in local communities and create new jobs.
The legislation, the Small Business Capital Expansion and Improvement Act (H.R. 5906), would extend the deduction for new equipment purchases to include capital investment and improvements for small businesses with $5 million or less in gross tax receipts. The bill would allow small employers to take a deduction of up to $125,000 for capital investments similar to the current practice for new equipment purchases (under Section 179 of the tax code). This would provide a means to free-up resources to hire additional employees and further grow their businesses.
“I am proud to join my colleagues in the introduction of this important legislation. During this time of economic downturn, it is critical that Congress work in a bipartisan manner to create sound business policy,” said Boren. “In Oklahoma and the Second District, one the poorest in the nation, small business is an important catalyst for reviving and diversifying local, rural economies. I look forward to working with Congressman Fossella and Congressman Herger in the future on legislation that helps small business owners thrive.”
U.S. Congressman Fossella said, “Small businesses are the backbone of our local communities and critical to our economic recovery. Unfortunately, current law does not offer tax incentives for small employers to expand their businesses by making capital improvements. This bill will encourage small employers to make capital investments to grow their businesses. It will also help spur economic growth in communities across America and help our nation overcome the economic challenges we face today.”
U.S. Congressman Herger said, “As a longtime small business expensing advocate, and sponsor of legislation to dramatically increase the amount employers can expense, the Fossella legislation is the logical next step in expensing. It’s critical that our nation’s small business employers have the ability to expense a broader array of capital property. By expensing more, companies will clear up valuable cash flow from physical overhead, and be able to invest more in workforce development, hire new employees, and pay more in wages. This is exactly the kind of pro-growth tax flexibility we need, especially now.”
There are roughly 5.4 million small businesses in the United States with gross receipts under $5 million, according to the Small Business Administration (SBA). They employ about 35 million Americans. About 50% of all private sector employees work for a small business, and it is estimated that 60-80% of all new hires are employed by small businesses.
“Small business owners, the job creators of this country, want to grow and expand their businesses and this legislation will go a long way to help many small firms do just that. Many small employers want to improve their business by upgrading or expanding their current facilities,” said Dan Danner, executive vice president of the National Federation of Independent Business (NFIB). “Allowing small business owners to deduct such expenses immediately will encourage many small business owners to make these types of investments, promoting economic growth nationwide. If Congress wants to strengthen the economy, it makes sense to provide these types of tax incentives to small businesses so that they can upgrade their businesses and create more new jobs.”
Of the key votes monitored by NFIB in the 110th Congress, Congressman Boren has voted in support of small businesses 100 percent of the time.
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