NPES Urges Legislators to Vote 'Yes' on America’s Small Business Tax Relief Act of 2015
RESTON, VA—February 9, 2015—NPES The Association for Suppliers of Printing, Publishing and Converting Technologies—and the over 600 companies it represents—urges swift enactment of H.R. 636, the America’s Small Business Tax Relief Act of 2015. This vital legislation would permanently restore IRC Section 179 (“Small Business”) expensing) to $500,000 and index it to inflation, thereby spurring much needed capital investment, economic growth and jobs.
Section 179 expensing allows businesses—large and small—to immediately deduct the cost of qualified capital investment in the year that it is purchased, rather than having to depreciate it over many years. Since 2003 Congress has repeatedly expanded and extended Section 179 expensing nine times, during two Presidential Administrations, six Congresses, under both Democratic and Republican leadership, and has steadily increased the amount of investment that businesses can expense from $25,000 to $500,000. But these expansions and extensions have only been temporary, and regrettably at the beginning of 2015 Section 179 has reverted to only 25,000 where it will remain unless Congress acts.
Section 179 expensing is not a “tax cut” or a “tax loophole.” It simply gives companies the ability to recover the cost of investing more quickly than standard depreciation. This is similar to how other business expenses that can be fully deducted in the year they are incurred are treated. Expensing simply accelerates the recovery of capital investment cost, and does not reduce revenue to the government. Thus, Section 179 expensing gives businesses the incentive and ability to maximize investment during years with positive cash flow, which fuels expansion, growth and jobs. This can be particularly important for small businesses that are more reliant on earnings to finance new investment.
Making Section 179 expensing permanent at the $500,000 level would greatly improve businesses’ ability to plan capital investment with certainty in 2015 and beyond. This is especially true for suppliers and purchasers of capital goods like printing, publishing and converting technology that is typically specifically engineered to customers’ needs and requires adequate time to “place in service.”