Small businesses could get a boost if Congress approves a new bill introduced by Sens. Bob Casey, D-Pa., and Susan Collins, R-Maine.
Dubbed the Small Business Tax Certainty and Growth Act, the legislation would provide for tax breaks to help new businesses get off the ground and existing ones expand.
"It's aimed at making it easier for small businesses to invest capital in their communities, and we all know that capital investment fuels economic activity and job growth," Mr. Casey said in a conference call with Pennsylvania reporters.
The cost of the proposal hasn't yet been determined, and Mr. Casey and Ms. Collins have not yet identified offsets to pay for it.
One provision would permanently set the maximum allowable tax deduction at $250,000 indexed for inflation. The maximum has fluctuated three times in the last six years, making long-range planning difficult for business owners, Mr. Casey said.
The legislation also would provide for the upfront collection of anticipated depreciation allowances for capital expenses. Another provision would allow restaurants, retail facilities and leaseholders to spread depreciation write-offs over 15 years rather than the current 39.
The bill also calls for doubling the tax deduction for small start-up business expenses, bringing the maximum to $10,000. The benefit applies to businesses with start-up expenses under $60,000.
Another measure would simplify accounting procedures by allowing businesses to report their finances on a cash basis instead of the more accurate accrual basis.
Most benefits phase out as business acquisitions exceed $800,000 or -- for the cost-basis accounting provision -- phase out when gross receipts exceed $10 million.
"My top priority continues to be job creation, and this bill is a common-sense step to incentivize small businesses to hire," Mr. Casey said. "Passing these measures will help create jobs and boost economic growth across the country."
He said the measures would provide entrepreneurs with the certainty they need to make long-range investments in their businesses.
Ms. Collins said small businesses are the nation's job creators and that even the smallest among them have a big effect on the economy.
"Our bill eases complex accounting rules for the smallest businesses, and it reduces the tax burden on newly formed ventures," she said in a floor speech.
David N. Taylor, executive director of the Pennsylvania Manufacturers Association, said business owners especially appreciate the effort to provide up-front tax deductions on anticipated depreciation. For some, the provision could make all the difference in decisions to invest in new equipment.
"The way it usually works is that year-over-year you can write off some percentage of the value of your equipment, but with bonus depreciation you can take all the deductions at once. You don't get any more after that, but putting it all up front allows an employer to make a purchase that he or she wouldn't have been able to afford otherwise," Mr. Taylor said.
The bill's other provisions are helpful, too, he said.
"These changes are things the business community has been asking for. Anything that makes it more affordable to get new gear or upgrade your gear is going to help."