Wherever I go in Michigan, I hear from small business owners who are doing their best to weather this recession. These companies are the engines of job creation, which is why I worked so hard to pass the Small Business Jobs Act. The new law gives small business what they have been asking for: access to capital and tax cuts.
A new Small Business Lending Fund will be setup to help community banks increase loans. With stricter regulations imposed after the financial market collapse, many smaller banks have been unable to provide enough loans to local small businesses. This new $30 billion fund will be matched with private dollars to leverage $300 billion in increased loans for small companies. It also increases access to loans from the Small Business Administration, and it provides support for an innovative Michigan program, run by the MEDC, to help companies whose collateral has lost value.
The new law gives small businesses $12 billion in tax cuts and eliminates the capital gains tax on small business stock. It also expands tax cuts to allow small business owners to immediately write off up to 50 percent of qualifying investments and expands the use of Section 179 expensing, which now allows a company to write off up to $500,000 o the cost of qualifying property the year it was purchased, rather than waiting to recover the cost over several years.
>The Small Business Jobs Act accelerates the rate at which all businesses can deduct capital investments through bonus depreciation. It changes rules so that the use of cell phones can be deducted without burdensome extra documentation – making it easier for virtually every small business to receive deductions they are entitled to, beginning on their taxes for this year.
The Small Business Jobs Act doubles the tax deduction for start-up companies (from $5,000 to $10,000), allows many small businesses to carry back their general business credits to offset five years of taxes, and changes the law to reduce taxes for C-corporations that became S-corporations. Finally, it allows sole proprietors to deduct the cost of health insurance for themselves and their families when calculating their 2010 self-employment tax.
The passage of this bill is great news for Michigan small businesses. But we still have work to do. I’m sponsoring a measure to completely eliminate a requirement that small businesses file 1099 forms with the IRS for all payments $600 or more, including goods, property, and services. This new requirement, which takes effect in 2012, would be a costly burden for small business owners, which is why I am working hard to eliminate this provision.
As we come out of this recession, we need to continue cultivating an economic environment that encourages small business to succeed and grow. The new Small Business Jobs Act, the fourth major jobs bill passed this year, is an important part of that effort.