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NTU urges all Representatives to vote "YES" on H.R. 4457 and H.R. 4453
June 11, 2014
NTU strongly urges all Representatives to vote “YES” on H.R. 4457, the “America’s Small Business Tax Relief Act of 2014.” This legislation would make permanent the pre-2014 expensing amount of $500,000(with a total investment limit of $2 million) that can be immediately deducted by small and medium-sized businesses.
This increased threshold for the deduction of certain capital investments in the year in which they were made removes costly uncertainty related to financial decisions and long term planning. The legislation also helps businesses avoid complicated depreciation calculations. Though H.R. 4457 falls short of full business expensing, the legislation would restore a lapsed provision of the law that was until its expiration moving the system in this salutary direction.
NTU also urges all Representatives to vote “YES” on H.R. 4453, the “Permanent S Corporation Built-In Gains Recognition Period Act of 2014.” This legislation would protect S Corporations from extended periods of punitively high taxes as a result of tax status conversion or asset acquisition.
The current ten-year recognition period for built-in gains subjects S Corporations to extremely high corporate level tax rates of 35 percent. Not only does such a confiscatory level of taxation hurt economic growth, it also prevents S Corporations from reaping the economic benefits of reorganizing from or assuming the assets of a C Corporation. The result makes businesses less flexible and responsive to market changes. In addition, lowering the built-in gains period from 10 to 5 years relieves businesses of the burden of tracking the disposition of assets over a long period of time.
Roll call votes on H.R. 4457 and H.R. 4453 will be included in our annual Rating of Congress and “YES” votes will be considered the pro- taxpayer positions.
If you have any questions, please contact NTU Federal Affairs Manager Nan Swift at (703) 683-5700