Reed Positions Small Businesses & Farmers to Gain under Permanent Policy
Tom Reed voted Thursday to give small businesses the certainty they need to hire more employees and confidently invest in their companies. Reed cosponsored the bipartisan America’s Small Business Tax Relief Act of 2014, a bill that makes permanent the long-standing Section 179 tax provision for small business expensing.
“We need to take common sense steps to give job creators more certainty and more control over their own financial situation,” Reed said. “Small businesses and farmers need to know the tax landscape so that they can make investments in equipment and employees. They deserve the freedom and flexibility to immediately deduct the cost of new equipment and technology upgrades so they can better manage cash flow and make investments in new jobs that otherwise might have been put on hold.”
The small business provision outlined in Section 179 of the tax code allows business owners and farmers to immediately deduct the cost of investments and upgrades in property, equipment and software instead of depreciating those costs over time. For tax years 2010 through 2013, the expensing limit for small businesses was $500,000. That expensing limitation expired at the end of last year, drastically dropping the limit for tax years after 2013 to $25,000. Under the House-passed provision, Section 179 of the tax code would become permanent at the 2013 level, giving small business owners greater opportunities to invest in their businesses.
“When Washington keeps small businesses and farmers guessing year after year what the tax landscape will look like, it’s harder for them to plan, invest and hire,” Reed continued. “Making this pro-jobs, pro-growth policy permanent is fair to small businesses which suffer when tax policies are extended for only one or two years at a time.”
Reed has met with small businesses and farmers in the district about making the provision permanent and heard a common theme that long-term, permanent tax policies give them stability and certainty.
“Section 179 provides incentives for small businesses to purchase the equipment they need to grow,” said Mike Flesher of Taylor Rental in Ithaca. “Not knowing if this part of the tax code will be available makes the decision to buy the equipment we need difficult. The possibility of section 179 becoming permanent is encouraging. This would give us the certainty we need to plan our purchases, now and into the future.”
"As a dairy farmer, much of what we experience is out of our control from the weather to milk prices,” said Stephanie Bergen, Schuyler County dairy farmer and president of Schuyler County Farm Bureau. “So having some stability to better plan for major purchases of farm machinery is welcome relief in what can be uncertain times. I commend Rep. Reed for his efforts to permanently extend the 2013 level of Section 179 small business expensing limitations. This will assist family farms like mine to further contribute to our rural economy.”
“Restoration of the Section 179 Accelerated Depreciation allowance is very important to small business because it reduces the tax burden on businesses which invest in new equipment,” said Steve Lounsberry of Applied Technology Manufacturing Corp. in Owego. “In the past this provision provided a significant incentive which helped our company purchase new (made in USA) computerized machining centers to keep us competitive, and also resulted in the hiring of additional people to operate them.”