Appropriations Act Takes on Tax Issues, Trucking Rules

Congress and President Obama took action on a bill last week that affects glazing businesses and manufacturers, among other small- and medium-sized companies.

capitolThe legislation (H.R. 2029) passed with strong bipartisan support and includes the permanent extension of the Section 179 deduction, multi-year extensions of tax incentives for energy efficient improvements and bonus depreciation, suspension of the Health Insurance Tax (HIT), continued relief from commercial trucking rules and the permanent extension of the research and development tax credit.

Provisions in the overall legislation that could impact businesses in the industry include:

  • Extension of Section 179 Deduction: Permanently extends the limit for the Section 179 Deduction to $500,000, which allows small businesses to deduct the full purchase price of qualifying property and software place in service;
  • Bonus Depreciation Extension through 2019: Extends bonus depreciation for another five years (2015-2019). For 2015-2017, it allows business a 50-percent bonus depreciation for property placed in service. The amount phases down to 40 percent in 2018 and 30 percent in 2019;
  • Energy Efficiency Tax Incentives Extended Through 2016: Extends the tax credit for energy efficient improvements for existing residential homes (25C), tax credit for energy efficient improvements for new residential homes (45L), and deduction for energy efficiency improvements for commercial buildings;
  • Suspension of the Health Insurance Tax in 2017: One-year suspension of the Health Insurance Tax (HIT) in 2017. The tax is levied annually on fully-insured health care plans and is offered by many small- and medium-size businesses. In 2015 and 2016, the federal government is expected to collect $22.6 billion from the HIT;
  • Continued Relief from Hours of Service Rules for Commercial Trucking: Continues the suspension of the 34-hour restart requirement as part of the Department of Transportation’s (DOT) Hours of Service (HOS) rules regulating the amount of time a commercial truck driver can spend behind the wheel, and;
  • The Research and Development Tax Credit: The provision permanently extends the research and development tax credit. Additionally, beginning in 2016 eligible small businesses ($50 million or less in gross receipts) may claim the credit against alternative minimum tax (AMT) liability, and the credit can be utilized by certain small businesses against the employer’s payroll tax (i.e., FICA) liability.

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