WASHINGTON (Dec. 18, 2015) — The U.S. House of Representatives has passed a tax cut package that would make several small business tax credits permanent rather than extending them for one or two years, often retroactively.
The package of tax cuts, collectively known as Protecting Americans from Tax Hikes (PATH) Act of 2015, passed in the House by a 318-109 vote, according to the National Federation of Independent Business (NFIB).
The Senate is also expected to pass the bill, according to the Specialty Equipment Market Association (SEMA), which supports the initiative. Among the provisions in the bill affecting small business:
- Permanently extend the research and development (R&D) tax credit.
- Permanently extend the Section 179 deduction limits allowing smaller companies to write off capital investments up to $500,000 in the year the purchases were made with a $2 million cap on annual investments, and indexed for inflation.
- Permanently allow businesses to deduct the cost of investments made to leased property and retail space over 15 years in an equal amount each year.
- Extend through 2016 the 7-year recovery period for motorsports entertainment complexes.
- Renew but gradually decrease the bonus depreciation for investments in capital equipment made through 2019. The bill extends the 50-percent bonus depreciation through year-end 2017, after which the rates would fall to 40 percent in 2018 and 30 percent in 2019.