Sen. Snowe: Extend Tax Relief for American Small Businesses

Press Release

U.S. Senator Olympia J. Snowe (R-Maine) introduced legislation today to provide targeted tax relief by ensuring taxes on the nation's small businesses will not increase at the end of the year. The "Small Business Tax Extenders Act of 2011" extends the tax relief provisions included in the Small Business Jobs Act of 2010. Senator Snowe, the former Chair and now Ranking Member of the Senate Committee on Small Business and Entrepreneurship and a senior member of the Senate Finance Committee, which has jurisdiction over tax issues, said it is imperative for Congress to enact these expiring provisions that have long attracted broad bipartisan support.

Senator Snowe said:

"There is no more urgent imperative than job creation in our nation and time is of the essence if we are to assist our nation's small businesses. This is precisely why we must prevent the impending tax increase on small businesses, which will go into effect if we do not extend the tax relief provisions contained in the Small Business Jobs Act of 2010. These provisions have served as a job-saving lifeline for businesses across the country. At a time when more than 14 million Americans are unemployed and have been for the longest period since record keeping began in 1948, our government should take every possible step to ease the burden on America's job creators. It is critical we continue implementing practical solutions, which can result in job creation. Our nation's anemic economic growth is precisely why we must extend these tax incentives to the small business community.

"No matter the issue we are debating, it's time we retool our thinking so that in every matter before us, we strive to create a climate in which our job creators can not only survive, but thrive. In the long term, the only way to ensure small and large businesses alike remain competitive and prosperous, is to overhaul our entire tax code. The current code is too complex, too cumbersome, and too riddled with loopholes. We must ensure every American pays their fair share and is not overly burdened by doing so. I urge my colleagues to approve this extension of relief, and immediately undertake the comprehensive reform our tax code so desperately requires."

Specifically, the Small Business Tax Extenders Act of 2011 will:

* Eliminate all capital gains taxes on qualifying small business investments through January 1, 2013.

* Allow qualified small businesses to carry back general business credits to offset five years of taxes as a cash-flow tool for businesses that are currently not realizing profits.

* Allow qualified small businesses to reduce their AMT liability for general business credits by allowing credits to be applied against regular income tax and AMT liability.

* Benefit businesses that were initially C corporations, but elected to be taxed as S corporations and had net built-in gains when they made the S corporation election.

* Extend the availability of Section 179 expensing to give businesses the option of writing off the cost of qualifying capital expenses in the year of acquisition in lieu of recovering these costs over time through depreciation.

* Allow accelerated cost recovery of certain eligible asset purchases by deducting 50% of the purchase in the current year, then depreciating the remaining 50% over the life of the asset (e.g., contractors can take advantage of bonus depreciation in year one even if they complete work in year two).

* Allow contractors that do not complete contracts within the same year in which they are entered into to benefit from bonus depreciation.

* Allow larger deductions for start-up costs.

* Provide relief to the self-employed by allowing them to deduct health insurance costs when calculating net earnings from self-employment for purposes of the Self-Employment Contributions Act (SECA) taxes.

A copy of the bill is below.

Source