On Thursday, June 12th the House passed the subsequent bills designed to provide substantial tax benefits to businesses:
• H.R. 4457, passed by a vote of 272 to 144, entitled the “America’s Small Business Tax Relief Act of 2014,” would permanently extend I.R.C. § 179 expensing of up to $500,000 after the bonus depreciation limit expired last year; and
• H.R. 4453, passed by a vote of 263 to 155, entitled the “S Corporation Permanent Tax Relief Act of 2014,” makes permanent the shortening of the built-in gains tax-holding period for S corporations from 10 years to 5 years to give S corporations quicker access to capital. It further contains a basis adjustment fix for charitable contributions made by S corporations.
The House Ways and Means Committee Chairman Dave Camp, R-Mich., applauded the passage of the two bills and indicated “another round of bipartisan votes sends a strong signal to the Senate that permanent tax policy is the right step for businesses to grow and to hire and help hardworking Americans see bigger paychecks. It is time to be honest with the American people—these policies are not going away anytime soon — so let’s do what is right and give businesses and their workers the certainty they deserve. Washington needs to stop its constant tinkering with the tax code and provide permanent tax relief to help strengthen the economy.”
However, Camp’s Democratic counterpart on the committee, ranking member Sander Levin, D-Mich., pointed out that the cost of the permanent tax breaks had not been paid for or offset in either pieces of legislation and would add to the budget deficit. He also noted that President Obama has already indicated that he would veto the bills if they crossed his desk, and the Senate Finance Committee is taking a different approach with tax extenders legislation. To that end, the reconciliation process of the House and Senate bills will likely be arduous and drawn out, but hopefully Congress can continue their momentum with their drafting of tax legislation before adjourning for summer recess.
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