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Public Statements

Statements on Introduced Bills and Joint Resolutions

Floor Speech

By:
Date:
Location: Washington, DC

Ms. COLLINS. Mr. President, I rise to speak about legislation, the Small Business Tax Certainty and Growth Act of 2013, which I introduced today along with my friend and colleague, Senator Casey.

Small businesses are our Nation's job creators. Firms with fewer than 500 employees generate about 50 percent of our Nation's GDP, account for more than 99 percent of employers and employ nearly half of all workers. According to the Bureau of Labor Statistics, firms with fewer than 500 employees accounted for 65 percent of the new jobs created from 1993 to 2009.

Even the smallest firms have a huge effect on our economy. Small Business Administration data indicate that businesses with fewer than 20 employees accounted for 18 percent of all private sector jobs in 2010.

The Small Business Tax Certainty and Growth Act of 2013 allows small businesses to plan for capital investments that are vital to expansion and job creation. Our bill eases complex accounting rules for the smallest businesses, and it reduces the tax burden on newly formed ventures.

Recent studies by the National Federation of Independent Business, NFIB, indicate that taxes are the number one concern of small business owners, and that constant change in the tax code is among their chief concerns. A key feature of this bill is that it provides the certainty small businesses need to create and implement long-term capital investment plans, which are vital to growth. For example, section 179 of the Internal Revenue Code allows small businesses to deduct the cost of acquired assets more rapidly. The amount of the maximum allowable deduction has changed three times in the past 6 years, and is usually addressed as a year-end ``extender,'' making this tax benefit unpredictable from year to year, and therefore difficult for small businesses to take full advantage of in their long-range planning. Our bill permanently sets the maximum allowable deduction under section 179 at $250,000, indexed for inflation, and ensures that only small businesses can take advantage of the benefit because it phases out as acquisitions exceed $800,000.

The Small Business Tax Certainty and Growth Act of 2013 also allows more companies to use the intuitive cash method of accounting by permanently doubling the threshold at which the more complex accrual method is required, from $5 million in gross receipts to $10 million. This includes an expansion in the ability of small businesses to use simplified methods of accounting for inventories.

The bill also eases the tax burden on new businesses by permanently doubling the deduction for start-up expenses from $5,000 to $10,000. Like section 179, this benefit is limited to small businesses, and the deduction phases out for expenses exceeding $60,000.

The Small Business Tax Certainty and Growth Act of 2013 extends for one year provisions which provide benefits to businesses large and small--so-called ``bonus depreciation'' and 15- year depreciation for improvements with respect to restaurants, retail facilities, and leaseholds. Although permanence is important, I believe that tax provisions that affect businesses of all sizes should be debated and addressed in the context of comprehensive, pro-growth tax reform, which I urge the Senate to undertake.

The provisions in the Small Business Tax Certainty and Growth Act of 2013 would make a real difference in our Nation's small businesses' ability to survive and thrive. I recently spoke with Rob Tod, the founder of Allagash Brewing Company, which is based in Portland, ME. Allagash makes some of the best craft beer in the country. It started as a one-man operation in 1995. In the 18 years since, it has grown into a firm that employs approximately 65 people and distributes craft beer throughout the United States. Rob noted that his company's expansion was fueled in part by bonus depreciation and section 179 expensing. New to the craft beer business, Rob had difficulty obtaining financing on favorable terms. But these cost recovery provisions allowed Rob to pay less in taxes in the years he acquired the equipment needed to expand his business. Those tax savings were then reinvested in his business, thus creating jobs. This economic benefit is multiplied when you consider the effect of Allagash's investment on the equipment manufacturers, the transportation companies needed to haul new equipment to his brewery, the increased inventory in his brewery, and the suppliers of the materials needed to brew additional beer.

In light of the positive effects this bill would have on small businesses and our economy, I urge my colleagues to support the Small Business Tax Certainty and Growth Act of 2013. This bill has been endorsed by the NFIB, an important voice for small business.

Mr. President, I ask unanimous consent that a letter of support be printed in the Record.

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