Legislation aimed at helping farmers, ranchers and small businesses buy equipment and build their operations was introduced this week in Congress.
U.S. Sens. Shelley Moore Capito (R-WV) and John Barrasso (R-WY) said the Growing American’s Small Businesses and Manufacturing Act will reduce tax bills for business owners, freeing up resources to purchase equipment, pay employee salaries and build their businesses. The legislation revises a limitation from 30 percent of a business’s earnings before interest and taxes ((EBIT) back to 30 percent of earnings before interest, taxes, depreciation, amortization and depletion (EBITDA). Additionally, the legislation would allow taxpayers to deduct the cost of some business assets in the year they are received rather than depreciate them over time.
“West Virginia’s manufacturers and small business owners are the backbone of our economy,” Capito said. “The Growing America’s Small Businesses and Manufacturing Act will give them the tools they need to compete, grow, and hire. By allowing greater investment in equipment and operations, this bill strengthens our global competitiveness and supports the hardworking Americans driving innovation and economic growth across the country.”
Part of the legislation reverting from EBIT to EBITDA was previously introduced by Capito as part of a larger reform bill. The bill would also increase the maximum deduction amount under the 2017 Tax Cuts and Jobs Act from $1 million to $2.5 million. The provisions cover a wide range of expenses including machinery, mining tools, farming implements, energy production equipment, commercial vehicles, building upgrades and other investments.
The new legislation is an effort to overturn some burdensome regulations, the law makers said.
“Wyoming’s small businesses are what keeps our economy going strong. We want to make sure they have every opportunity to succeed,” Barrasso said. “The Growing America’s Small Businesses and Manufacturing Act will go a long way in helping Wyoming’s farmers, ranchers and small businesses expand their operations, better compete and hire more workers.”
A number of organizations in the manufacturing, agricultural and energy production industries support the legislation.
“Manufacturers are driving the economy by investing in job-creating projects and cutting-edge equipment and machinery. The Growing America’s Small Businesses and Manufacturing Act would incentivize and support these important investments by reducing the cost of capital equipment purchases and the debt financing that makes them possible,” Charles Crain, Managing Vice President of Policy for the National Association of Manufacturers (NAM), said.