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Changes That Benefit Small Businesses Face Senate

Jan. 13, 2005

U.S. small businesses stand to benefit from several provisions of legislation that cleared the House of Representatives Mar. 9 by a 257-169 vote. The measure: Increases the cost of equipment that can be expensed (written off in one tax year) to ...

U.S. small businesses stand to benefit from several provisions of legislation that cleared the House of Representatives Mar. 9 by a 257-169 vote. The measure:

Increases the cost of equipment that can be expensed (written off in one tax year) to $30,000 from the current $19,000.

Reduces the top estate-tax rate to 50% from the current 55% by the year 2002.

Repeals a three-month-old law that requires small business owners to make a lump-sum capital gains payment in the year a business is sold -- even if the buyer is paying for the purchase in installments. The House-passed measure, which is part of a larger legislative package that would raise the federal minimum wage to $6.15 an hour from $5.15 an hour in two steps this year and next, must now be reconciled with a competing Senate version and approved by both the House and Senate before it's sent to the White House. Presidential approval is not a sure thing; the White House has signaled its unhappiness with the size of some of the measure's tax provisions.