U.S. Rep. Ron Kind, senior member of the tax-writing House Ways and Means Committee, has introduced the Rural Microbusiness Investment Credit Act of 2011 (H.R. 2858) to help generate investment in both start-up and expanding rural microbusinesses. The President's recently unveiled American Jobs Act includes similar support for small businesses, including new tax cuts to businesses to support hiring and investment as well as helping business owners and entrepreneurs access capital and grow. Rep. Kind introduced the bill with his colleague, Wally Herger (R-CA).
"Small businesses are the backbone of our economy and critical to our way of life in rural Wisconsin," said Rep. Kind. "We must provide the support they need not only to keep their doors open but for new startups to get up and running. This bill will not only provide our small businesses much needed investments to hire and grow, bringing new jobs to our communities, but also help entrepreneurs get the capital they need to get off the ground and start contributing to local economies."
In rural areas across the country, microbusinesses are creating many jobs in this tough economic time. Unfortunately, other small businesses incentives and tax credits often leave out these smaller microbusinesses. The Rural Microbusiness Investment Credit Act is the first tax credit specifically for microbusinesses. The bill amends the tax code to provide a 35 percent federal tax credit (up to $10,000) to entrepreneurs, including family farmers, who invest in their businesses and is targeted to entrepreneurs operating in economically distressed rural areas. Since many small rural businesses often have a hard time accessing credit, the act is geared toward those with five or fewer employees, annual gross revenues that do not exceed $1 million, and that are in towns will high unemployment levels and populations of 50,000 or less. Under the bill, microbusiness owners are able to carry back the credit for five years and use it to offset taxes in previous years. This is critical for startup and current businesses that need help making critical investments during this tough economic time.
"Policies such as those proposed by [this] legislation that support rural entrepreneurship can be expected to increase the economic impact of small enterprises in rural communities," said Bob Stallman, President of the American Farm Bureau Federation. "We commend [Rep. Kind and Rep. Herger] for recognizing the importance of rural economic development and for introducing this legislation to help jump start rural America."