Today, U.S. Rep. Ed Perlmutter (CO-07) voted to support and the House passed H.R. 5297 -- the Small Business Jobs Act by a vote of 237 to 187. H.R. 5297 will expand much needed lending to millions of small businesses and offer tax incentives to help small businesses grow, hire new employees, and move our economy forward. This legislation is fully paid for over 10 years, will not add to the deficit and is estimated to help small businesses create 500,000 new jobs.
"Small businesses are the engine that drives our economy. Lately, there has been a lot of talk from both sides of the aisle about helping small businesses by reducing their taxes and providing them more access to credit to allow them to hire new employees, buy inventory and expand. This bill today does all of that and more. It is fully paid for and will not add to the deficit. It cuts taxes on small businesses by $12 billion dollars. Again, it cuts taxes for small businesses by $12 billion which will allow them to hire new employees and increase their investment in equipment and facilities.
"Unfortunately, last week when the Senate passed this bill they did not include my amortization amendment which would enable community banks to write down real estate losses over a six to ten year period, which would free up more capital for small businesses. My amendment would have an immediate positive impact and would not cost a dime. This would allow Main Street more access to credit so small businesses could grow and hire new employees. In the 1980's this policy helped Colorado farmers and it can help now. I will continue to work hard to push common sense solutions to help Colorado's hard working small business owners and employees," stated Perlmutter.
Important Provisions of H.R. 5297 -- the Small Business Lending Act are listed below:
Expand Small Businesses Access to Capital
-Creates a $30 billion Small Business Lending Fund to provide community banks with capital to increase small business lending. The fund is limited to the smallest banks, those holding $10 billion or less in assets, with key performance-based standards to incentivize those lenders that extend new credit to small businesses (decreasing the dividend rate banks pay as they increase small business lending).
-Invests $1.5 billion in grants to support $15 billion in new small business lending through already successful state programs.
-Expands access to and lowers costs for small businesses to access SBA loans and increases Small Business Administration (SBA) loan limits.
-Spurs investors by giving 100% exclusion from capital gains taxes on small business investments.
-Reduces small business taxes by allowing them to carry back general business tax credits to offset their taxes from the previous five years. Small businesses will also be able to count the general business credits against the Alternative Minimum Tax (AMT), freeing up capital for expansion and job growth.
Spur Small Businesses Investments & Growth
-Doubles small business expensing (to $500,000, phasing out at $2 million) -- for immediate write offs of capital investments, such as equipment and machinery, in 2010 and 2011. Also expands purchases qualifying for expensing to include certain types of real property, such as leasehold, retail and restaurant improvements.
-Extends Bonus Depreciation -- allowing businesses to immediately write off 50% of the cost of new equipment investments in 2010.
-Spurs investment and growth -- the bill helps give small businesses more cash on hand to create jobs.
Promote Entrepreneurship and Small Business Exports
-Doubles to $10,000 the tax deduction for start-up expenditures for entrepreneurs looking to launch a new venture.
-Creates a variety of new tools to help small businesses gain international market access and export goods (at USTR, SBA, and Commerce), including a new State Export Promotion Grant Program (STEP), which will leverage more than $1 billion in exports.
Promote Fairness in Competition
-Improves tax fairness by preventing small businesses from incurring large tax penalties aimed at large corporations and wealthy individuals investing in tax shelters. (Section 6707A)
-Removes onerous requirements that complicate the ability to deduct costs of cell phone use as a regular business expense.
-Allows self-employed individuals to deduct health insurance costs in paying the self-employment tax in 2010.
-Removes the red tape and closes loopholes that too often put government contracts into the hands of multinational corporations, instead of Main Street businesses -- such as periodic reviews of small business size standards in government contracts and requiring prompt payments to small business subcontractors from large businesses with government contracts.
Fully Paid for/Closing Tax Loopholes & Tax Gap
-Another important step to close tax loopholes that promote corporations shipping jobs overseas -- dealing with the source rules on guarantee fees for indebtedness.
-Closes a loophole that allows paper mills to claim biofuel tax credit for a byproduct known as "crude tall oil"-- a waste by-product of paper manufacturing. The bill would limit the tax credit to fuels that are not highly corrosive (i.e., fuels that could be used in a car engine or in a home heating application).
-Allows 401(k), 403(b), and governmental 457(b) plans to permit participants to roll their pre-tax account balances into a Roth account. Contributions to Roth accounts are taxed when made, but distributions of both principal and earnings are tax-free upon withdrawal.
-Reduces the tax gap by requiring information reporting for rental property expense payments, increasing penalties for failure to file information returns, and tightening the process for going after federal contractors who have not paid their federal taxes.