Today, the House passed a bill permanently extending Section 179 (H.R. 4457, America's Small Business Tax Relief Act) and a measure extending S corporation provisions (H.R. 4453, the Permanent S Corporation Built-in Gains Recognition Period Act).

In remarks on the House floor today, Ways and Means Committee Chairman Dave Camp said, “It seems these days that Congress can rarely agree on much.  So, when we can find some common ground to help grow the economy and get businesses to invest and hire new workers, we should act immediately.  The legislation we have before us today, “America’s Small Business Tax Relief Act of 2014,” would do just that by providing a permanent extension of Section 179 expensing at a level of $500,000.  Section 179 is a bipartisan provision that has been in place since the 1950’s.  But, businesses, farmers and ranchers cannot reap the full benefits when they have no idea if the provision is going to be around the next year, or what it may look like.  This hurts their ability to plan for the future and expand their business.”

Regarding the S corporation bill, Camp said, “The bill we have before us today is the right step forward the level the playing field between the small businesses on Main Street and big businesses.   If a small business chooses to operate as an S corporation for tax purposes, we should ensure that they have the ability to access certain capital without tax penalties.  Under current law, an S corporation is subject to an entity-level tax at the highest corporate rate on certain built-in gains of property that it held while operating as a C corporation.  The tax applies to gain recognized within ten years from the date that the C corporation elected to be an S corporation, and in the past, Congress has shortened that period to five years.  This bill would make permanent the five year period, eliminating a significant deterrent that often discourages closely held C corporations from electing S corporation status, thus subjecting them to double tax. Additionally, we should ensure that S corporations receive the same treatment as partnerships when it comes to charitable donations.  By achieving parity between different businesses, we can encourage all small businesses to continue their generous support of charitable activities.”  Camp added, “This is a bipartisan, commonsense bill that will give small businesses some much needed relief from the burdens of the tax code, and allow them to make new investments and create new jobs.”