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NFDA Urges Congress to Extend Tax Breaks for Small Businesses

Posted December 9, 2011

As Congress considers end-of-year legislation and whether to pass tax-related provisions designed to promote business investment and job creation, NFDA has joined other small business organizations in sending a letter to Congressional leaders asking them to help small businesses and improve their ability to access capital and purchase equipment.

Specifically, NFDA wants Congress to extend the current increased expensing limitations under Section 179 of the Internal Revenue Code, the shorter five-year holding period for built-in gains, and the 100 percent limit on bonus depreciation.

Under rules in place now, businesses of all sizes are allowed to write-off 100 percent of the cost of new equipment purchased and placed in service this year. Smaller firms also have the ability to write-off up to $500,000 in purchases of new and used equipment. Businesses that converted to S corporation status prior to 2007 have the ability to put any locked-in appreciated property to better use without paying punitive levels of tax.

Each of these thresholds is set to expire at the end of the year, thus increasing the cost of capital purchases for funeral homes and other small businesses while reducing their ability to access their own capital. Considering the on-going weakness of the economy, NFDA believes Congress should make every effort to help small businesses raise capital.