[Congressional Record Volume 159, Number 76 (Monday, June 3, 2013)]
[Senate]
[Page S3908]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS (for herself and Mr. Casey):
  S. 1085. A bill to amend the Internal Revenue Code of 1986 to provide 
tax incentives for small businesses; to the Committee on Finance.
  Ms. COLLINS. Mr. President, I rise to speak about legislation, the 
Small Business Tax Certainty and Growth Act of 2013, which I introduced 
today along with my friend and colleague, Senator Casey.
  Small businesses are our Nation's job creators. Firms with fewer than 
500 employees generate about 50 percent of our Nation's GDP, account 
for more than 99 percent of employers and employ nearly half of all 
workers. According to the Bureau of Labor Statistics, firms with fewer 
than 500 employees accounted for 65 percent of the new jobs created 
from 1993 to 2009.
  Even the smallest firms have a huge effect on our economy. Small 
Business Administration data indicate that businesses with fewer than 
20 employees accounted for 18 percent of all private sector jobs in 
2010.
  The Small Business Tax Certainty and Growth Act of 2013 allows small 
businesses to plan for capital investments that are vital to expansion 
and job creation. Our bill eases complex accounting rules for the 
smallest businesses, and it reduces the tax burden on newly formed 
ventures.
  Recent studies by the National Federation of Independent Business, 
NFIB, indicate that taxes are the number one concern of small business 
owners, and that constant change in the tax code is among their chief 
concerns. A key feature of this bill is that it provides the certainty 
small businesses need to create and implement long-term capital 
investment plans, which are vital to growth. For example, section 179 
of the Internal Revenue Code allows small businesses to deduct the cost 
of acquired assets more rapidly. The amount of the maximum allowable 
deduction has changed three times in the past 6 years, and is usually 
addressed as a year-end ``extender,'' making this tax benefit 
unpredictable from year to year, and therefore difficult for small 
businesses to take full advantage of in their long-range planning. Our 
bill permanently sets the maximum allowable deduction under section 179 
at $250,000, indexed for inflation, and ensures that only small 
businesses can take advantage of the benefit because it phases out as 
acquisitions exceed $800,000.
  The Small Business Tax Certainty and Growth Act of 2013 also allows 
more companies to use the intuitive cash method of accounting by 
permanently doubling the threshold at which the more complex accrual 
method is required, from $5 million in gross receipts to $10 million. 
This includes an expansion in the ability of small businesses to use 
simplified methods of accounting for inventories.
  The bill also eases the tax burden on new businesses by permanently 
doubling the deduction for start-up expenses from $5,000 to $10,000. 
Like section 179, this benefit is limited to small businesses, and the 
deduction phases out for expenses exceeding $60,000.
  The Small Business Tax Certainty and Growth Act of 2013 extends for 
one year provisions which provide benefits to businesses large and 
small--so-called ``bonus depreciation'' and 15- year depreciation for 
improvements with respect to restaurants, retail facilities, and 
leaseholds. Although permanence is important, I believe that tax 
provisions that affect businesses of all sizes should be debated and 
addressed in the context of comprehensive, pro-growth tax reform, which 
I urge the Senate to undertake.
  The provisions in the Small Business Tax Certainty and Growth Act of 
2013 would make a real difference in our Nation's small businesses' 
ability to survive and thrive. I recently spoke with Rob Tod, the 
founder of Allagash Brewing Company, which is based in Portland, ME. 
Allagash makes some of the best craft beer in the country. It started 
as a one-man operation in 1995. In the 18 years since, it has grown 
into a firm that employs approximately 65 people and distributes craft 
beer throughout the United States. Rob noted that his company's 
expansion was fueled in part by bonus depreciation and section 179 
expensing. New to the craft beer business, Rob had difficulty obtaining 
financing on favorable terms. But these cost recovery provisions 
allowed Rob to pay less in taxes in the years he acquired the equipment 
needed to expand his business. Those tax savings were then reinvested 
in his business, thus creating jobs. This economic benefit is 
multiplied when you consider the effect of Allagash's investment on the 
equipment manufacturers, the transportation companies needed to haul 
new equipment to his brewery, the increased inventory in his brewery, 
and the suppliers of the materials needed to brew additional beer.
  In light of the positive effects this bill would have on small 
businesses and our economy, I urge my colleagues to support the Small 
Business Tax Certainty and Growth Act of 2013. This bill has been 
endorsed by the NFIB, an important voice for small business.
  Mr. President, I ask unanimous consent that a letter of support be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                            National Federation of


                                         Independent Business,

                                     Washington, DC, June 3, 2013.
     Hon. Susan Collins,
     U.S. Senate, Dirksen Senate Office Building, Washington, DC.
       Dear Senator Collins: On behalf of the National Federation 
     of Independent Business (NFIB), the nation's leading small 
     business advocacy organization, I am writing in support of 
     the Small Business Tax Certainty and Growth Act of 2013, 
     which provides permanency and certainty to small businesses 
     regarding several tax provisions including Section 179, cash 
     accounting, and deductions for startup and organizational 
     expenses.
       The most important source of financing for small business 
     is their earnings, i.e. cash flow, which is closely tied to a 
     small business' overall tax burden. In NFIB Research 
     Foundation's Problems and Priorities, five of the top ten 
     small business concerns are tax related. The preservation of 
     cash flow is a key element for small businesses as Congress 
     considers comprehensive tax reform.
       Cost recovery for capital investments is closely tied to a 
     small business' effective tax rate and its ability to manage 
     cash flow. Section 179 expensing--especially with the 
     inclusion of real property--provides small businesses with an 
     immediate source of capital recovery and improved cash flow. 
     We appreciate you including this in your legislation. 
     Additionally, small businesses would benefit from an expanded 
     ability to use cash accounting for tax purposes. Permitting 
     more business entities with higher gross receipts to use cash 
     accounting helps small businesses to manage cash flow because 
     it better reflects the business owner's ability to pay taxes. 
     We appreciate you including both of these provisions in your 
     bill.
       Thank you for introducing this important legislation, and 
     we look forward to working with you to provide for permanent 
     small business tax incentives as the 113th Congress moves 
     forward.
           Sincerely,

                                                Susan Eckerly,

                                            Senior Vice President,
                                                    Public Policy.
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