The following are some of the major provisions of the stimulus package of interest to small business, according to Small Business Legislative Council, The Associated Press and other sources:
- It allows small businesses to take upfront deductions of up to $250,000 of the cost of equipment — such as computers, vehicles, furniture and manufacturing machinery — instead of depreciating the investment over a number of years. The deduction was slated to end in 2008, but was extended through 2009.
- It extends a bonus depreciation allowing small businesses to deduct half the cost of new qualifying capital equipment expenditures purchased in 2009, if the equipment is put into use by Jan. 1, 2010.
- It temporarily broadens the “carry–back” period for 2008 net operating losses from two years to five. This allows small businesses to apply 2008 losses to past and future tax bills, freeing up capital that can be pumped back into the business.
- It provides all taxpayers with deductions for state and local sales and excise taxes on purchases of new cars, light trucks, recreational vehicles and motorcycles, through 2009.
- It raises the percentage of gain an individual may exclude from taxable income, from the sale of certain small business stock, from 50 to 75 percent.
- It extends a credit businesses may take for electricity produced by wind energy, through 2012, and for electricity produced by other renewable resources, through 2013.
- It includes a temporary 65 percent subsidy for COBRA payments for nine months. Employees would pay the employer the lowered 35 percent of the premium, and employers would take a credit against payroll taxes for the amount of the subsidy.
A summary of the key provisions in the stimulus package is available from the Senate Finance and House Ways and Means committees.
Hat Tip to SAF E-Brief