The U.S. Senate was unable to agree on a SEMA-supported bill (H.R. 5297) to provide smaller banks with access to $30 billion in funds intended to be loaned to small businesses. While the Senate may reconsider the measure, the defeat meant that the House of Representatives would not consider the bill in the near future since House members will be working in their home districts during August. During the debate, SEMA sent a letter urging the Senate to also repeal a requirement that taxpayers with business income issue 1099 forms to all vendors from whom they buy more than $600 of goods or services in any year, beginning in 2012.
Besides pumping $30 billion into the banking system for loans, the Senate bill would also extend the bonus depreciation through 2010. In 2008 and 2009, all businesses were permitted to immediately write off 50% of the cost of new equipment (“bonus depreciation”). The depreciation expired at the end of 2009. SEMA contends the depreciation write-off encourages companies to invest in newer, more efficient equipment and spurs sales and creates jobs. The Senate bill would also expand and extend the Section 179 program, allowing companies to write-off up to $500,000 in capital expenditures in tax years 2010 and 2011, double the current limit for 2010.
The legislation needs a “super majority” of 60 Senate votes for passage. No Republicans have supported the bill to date, voicing concerns about procedural issues and the fact that the $30 billion would come from unspent money in the Troubled Assets Relief Program (TARP). SEMA is working with the National Federation of Independent Business and National Association of Manufacturers in support of the legislation.
For more information, contact Stuart Gosswein at stuartg@sema.org.