U.S. Senator Kay Hagan (NC) today expressed her disappointment that the Senate, by a 53-44 vote, failed to advance the Small Business Jobs and Tax Relief Act, which would have created 27,000 jobs in North Carolina and nearly one million jobs across the country. The bill would have provided tax relief for small businesses that increase payroll and allow business owners to write off 100 percent of purchases this year. Additionally, an amendment to the bill would have put the federal government on the path to creating a "common application" for small businesses, a proposal first introduced by Hagan in May.
"I'm disappointed that partisanship got in the way of putting North Carolinians back to work this year," Hagan said. "This bill would have helped small businesses - the backbone of our state's economy - grow and hire more workers right away. I will continue fighting for policies, such as my Common Application Act, that create a better environment for our small businesses to grow and get the people of North Carolina back to work."
Hagan's Small Business Common Application Act reduces the paperwork burdens that get in the way of small business growth. Hagan's legislation establishes a common application that allows small business owners to apply for grants, seek technical assistance, or bid on contracts from the federal government with a single form. The amendment would have created an interagency task force to study and make recommendations to Congress on the common application.
The Small Business Jobs and Tax Relief Act proposal would have provided a 10 percent income tax credit on new payroll-through either hiring or increased wages in 2012. With a maximum increase in eligible wages of $5 million per employer, the benefits of this tax credit would be targeted to North Carolina's small businesses.
The proposal also would have extended the 100 percent depreciation deduction for certain property. Typically, businesses expenditures are tax deductible in the year in which they are made, except for major purchases, such as large equipment, which must be written off over many years. One hundred percent depreciation allows businesses to write off the entire cost of major purchases in the year they are made rather than depreciate those expenses over many years. By accelerating in time the recovery of investment costs, "bonus depreciation" lowers the after-tax costs of plants and equipment. This encourages new investment and promotes economic recovery.