One of the biggest issues that’s cited over and over again by small business owners as being an impediment to their abilities to grow is the taxes they face from local, state, and federal governments. However, there may be good news in this regard, as the U.S. House of Representatives recently passed a measure that could save independent enterprises significant amounts of money going forward.
Lawmakers recently allowed a rule to lapse that granted small businesses the right to write off up to $500,000 in new equipment purchases, but has reinstated it with a vote this week, on a permanent basis, according to a report from the Wall Street Journal. Altogether, the vote went 272-144, indicating an overwhelming majority of lawmakers in the House supported the measure. In addition, this is one of perhaps a number of previously temporary tax breaks for businesses which may be extended to be permanent going forward.
“It’s time to make it a permanent part of the tax code,” U.S. Rep. Dave Camp, a Republican representing Michigan and the chairman of the Ways and Means Committee, said in floor debate on Thursday, according to the newspaper. “Why not do something good for America?…What we really need is permanent policy.”
Part of the process
There is, however, some debate about whether all of them should be allowed to go on in perpetuity, or if these new extensions should come with expiration dates as well. In all, as many as 50 such provisions for small businesses could be considered in the coming months. The Obama administration, for instance, recently came out against the permanent extension on the tax break for equipment purchases, saying that the added cost to the government of these tax changes are substantial and not counterbalanced with other spending cuts. Moreover, it’s believed that the political battling over these extensions could last for some time to come, perhaps through the end of the year, beyond the elections in November.
Owners who want to position their companies to be able to make equipment purchases as soon as possible, and when necessary, might be able to do so more ably by finding more affordable small business insurance. That could include cutting costs for liability insurance, which could save thousands of dollars annually, and those funds could then be put toward other aspects of the company, including potentially tax deductible equipment purchases.