Congress Reaches Spending Deal That Could Extend Small Business Tax Break

Date: December 16, 2015

Section 179 Among Tax Breaks To Be Permanently Extended Under Agreement

The Washington Post reported lawmakers announced late Tuesday that they had reached agreement “on a year-end spending and tax deal that would prevent a government shutdown and extend a series of tax breaks that benefit businesses and individuals.” The so-called omnibus spending package “also would lift the 40-year ban on crude oil exports” from the US. In exchange for agreeing to the provision, Democrats “secured” a five-year extension of tax breaks for wind and solar energy producers. The AP said the package would fund the federal government through fiscal year 2016 while increasing domestic and defense spending, and enlarging the deficit by hundreds of billions of dollars through the extension of various tax credits. The Hill reported that under the agreement, “many popular business tax provisions, including the research and development tax credit and the Section 179 small-business expensing deduction, would be locked into law.” The deduction will be made permanent at $500,000 per year initially if the bill is signed into law, then indexed to inflation.

What Happens Next

The tax agreement isn’t a done deal just yet. As The Hill reported, the full House still has to vote on the plan, which may happen Thursday. However, prior to that, “lawmakers will have to pass another short-term bill to avert a government shutdown.” The New York Times reported that House Democrats “pointedly declined to confirm that there was an agreement,” but “there was little doubt that a deal would ultimately be reached.”

What This Means For Small Businesses

The Section 179 small business expensing deduction is vital to helping US small businesses grow, NFIB has shown. Politico reported that NFIB “said Monday that it urged members to reach out to Capitol Hill in support of Section 179 expensing, resulting in over 8,000 letters” sent to Congress. News of the first stage of its approval in the House is a step in the right direction for small businesses.

Additional Reading

The Washington Times also covered the agreement.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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