So are the stimulus bills circulating on Capitol Hill good for small business? Well, yeah. Hundreds of billions of dollars in new government spending will reach small firms, either directly in federal contracts or indirectly as this money makes its way through the economy. Moreover, there are specific tax credits and treatments for investment in clean or conserved energy, and broadband deployment. (In this latter case, the Senate proposes tax credits; the House offers grants.)
But there’s more for business to like in the Senate bill. As a service to its readers, the Entrepreneurial Agenda compares the business tax and finance offerings from each chamber. Of course, the Senate hasn’t actually passed its version yet; so far, only a couple of powerful committee chairmen (and maybe a couple of ranking Republicans) have had their hand in this. But here’s what the Senate is considering today.
We’ll start with the tax provisions. Both the House and Senate giveth—and, in one instance, taketh away. But the Senate giveth more.
•Investment credits: Both houses extend the generous bonus depreciation terms included in the 2008 stimulus through 2010. The Senate further allows firms to accelerate alternative minimum tax or research credits instead of taking bonus depreciation, and includes film or videotape as property that qualifies for the depreciation. (The Agenda wonders: who bought that perk?) Both houses extend the generous 2008 stimulus provisions for Section 179 expensing through 2009.
•Loss carryback: Both houses would allow firms to carry back net operating losses incurred in 2008 or 2009 three to five years and offset profits in those years. The House version limits the maneuver to just 90 percent* of the losses in each year; the Senate contains no such limitation. Life insurance companies get special rules, and, thankfully, institutions participating in the bailout are excluded altogether.
•Work Opportunity Tax Credit: Both houses extend, through 2010, this tax credit for hiring disadvantaged people to include unemployed veterans and unemployed young people who’ve dropped out of school and lack basic skills.
Finally, both Houses would effectively repeal the special IRS rule widely regarded as a giveaway to banks to facilitate mergers. Unless the deal was struck or consummated by January 16th, your bank is out of luck.
In addition, the Senate is considering a bunch of additional provisions dreamed up by Finance Committee chairman Max Baucus that small businesses, especially, might find appealing.
Read the Rest at: Inc. The Entrepreneural Agenda by Robb Mandelbaum