SNOWE: TAX RELIEF FOR SMALL BUSINESSES BENEFITS ECONOMY, EMPLOYEES, AND CREATES JOBS

Senate Finance Committee Unanimously Passed the Work Opportunity Act of 2007 Bill Includes Snowe Provisions to Promote Investment, Reduce Tax Burden, and Simplify Tax Code

Washington D.C. – Today U.S. Senator Olympia J. Snowe (R-Maine) praised the Senate Finance Committee for their unanimous approval of legislation that will significantly reduce the tax burden of millions of American small businesses owners. Snowe, a member of the Senate Finance Committee, worked for the inclusion of provisions in the Small Business and Work Opportunity Act of 2007 that will simplify the small business tax code and give small businesses owners much needed tax relief. This legislation now awaits consideration by the full Senate.

“ This legislation achieves a rare and remarkable win-win for America’s small businesses, their employees, and the American economy without adding to our national debt,” Senator Snowe said. “This fiscally responsible tax relief for small businesses will not only reduce the tax burden for America’s true job creators, it will promote continued investment and help small businesses absorb the added costs of employee health care. The current tax code places an unfair burden on our small businesses who spend far too much of their time satisfying their tax obligation and complying with complex regulations. I am pleased the Committee unanimously passed this legislation today and I am hopeful the full Senate will recognize the importance of this legislation and take up this bill soon. ”

Senator Snowe advocated for the inclusion of the following provisions in the Small Business and Work Opportunity Act of 2007 passed by the Senate Finance Committee today:

The Work Opportunity Tax Credit (WOTC):

The WOTC allows employers credits against wages for hiring individuals from one or more of nine targeted groups (such as recipients of public assistance, qualified veterans on welfare, and “high risk youth”).  This provision extends the WOTC for five years to January 1, 2013 and expands the groups eligible for tax credits under the program to include veterans receiving service-connected disability for injuries received after September 10, 2001 and individuals otherwise eligible as “high risk youth” to include individuals age 18 to 39.  According to the Department of Labor more than 4 million workers having participated in the WOTC program to date.

 Fifteen-Year Straight Line Cost Recovery For Qualified Retail Improvements Property:

A provision that will extend accelerated depreciation for property improvements that is currently offered to retail operations that lease their space to retail operations that also own their property.  This provision provides relief and equity to our nation’s 1.5 million retail establishments, most of which have less than five employees.

 Expand Eligibility for Cash Method of Accounting:

A provision that will simplify tax compliance for small business owners by expanding the availability of the cash method of accounting to include businesses with gross receipts totaling up to $10 million. The previous threshold was $5 million.  The cash method, which records income when it is received in the form of cash or its equivalent and expenses when they are paid, is much less costly to perform than the accrual method which requires income and expenses to be paid only after the completion of a transaction, regardless of when cash is received or paid.

Small Business Expensing:

This provision would extend for one year a provision that allows small business to expense more of their investment in qualified property, currently allowed up to $112,000.  Allowing American small businesses to expense more of their investments like the purchase of essential new equipment provides substantial savings both in dollars and in the time small businesses would otherwise have to spend complying with complex and confusing depreciation rules. Moreover, new equipment will contribute to continued productivity growth in the business community. 

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