Entrepreneurs told the House Small Business Committee this week that tax relief enacted in the American Recovery and Reinvestment Act (ARRA) is helping small businesses recover from the recession and grow again. According to witnesses representing a broad cross-section of industries, tax relief in the Recovery Act has already reached small companies and is helping them stay afloat.
"The Recovery Act targeted $15 billion in tax relief to our nation's small businesses and small firms are already seeing the benefits of those steps," said Rep. Nydia M. Velázquez, the Chairwoman of the House Committee on Small Business. "Other Recovery Act measures are generating new demand for entrepreneurs' services. Still, we have quite a distance to go and now is not the time to be complacent. Congress must continue finding ways to help our small businesses through use of the tax code."
Witnesses at today's hearing lauded several specific provisions that were enacted through the ARRA. Members of the manufacturing sector said that changes to the tax code enabling them to fully depreciate capital purchases for items like trucks, computers and other equipment, is allowing small businesses to make purchases now, while putting more money back into their pockets this year, so they can grow. Representatives from the Air Conditioning Contractors of America presented a new survey of small firms in their industry. According to the findings, 75% of respondents said they had seen improved sales in efficiency systems thanks to green energy tax credits provided to consumers through the new law. Small business realtors testified that a new tax credit in the Recovery Act for first-time home buyers is beginning to fuel growth in that industry, as well.
"All of these measures are getting cash into the hands of entrepreneurs so they can either save jobs or create new ones," Velázquez said. "The challenge now is to formulate policies going forward that build on this momentum and help small firms continue leading the way to prosperity."
During the hearing, a number of ideas were discussed to further extend tax relief to small firms. For example, the hearing examined proposals to expand the first-time homebuyer credit. Other proposals would extend energy tax incentives. Members also expressed support for building on the success of the Net Operating Loss look back period and the depreciation expensing.
"The Committee will continue exploring ideas for helping America's entrepreneurs survive this downturn," Velázquez said. "Small businesses have led our nation out of previous downturns and I am convinced they will do so again."
At the conclusion of the hearing, Velázquez said that she and her colleagues would convey to the House Ways and Means Committee, which writes much of the nation's tax laws, the findings from the hearing, so that the entrepreneurs' ideas can be incorporated into future legislation.