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U.S. Congress Expected to Pass Short-Term Tax Extender Legislation

By SEMA Washington, D.C., Staff

The U.S. House of Representatives has passed legislation to renew more than 50 tax breaks for businesses and individuals that expired at the end of 2013. While many members of Congress were looking to permanently extend some of the tax credits and deductions, the bill (HR 5771) simply renews key tax breaks through the end of 2014, including tax credits for research & development (R&D) and equipment depreciation. The U.S. Senate is expected to approve the measure and send to the President to be enacted into law.

Of key importance to SEMA members, the bill supports investment in company products and equipment. It extends the R&D tax credit through 2014. It also extends the IRS Section 179 provision in effect from 2010 to 2013 by allowing companies to write off 100% of their capital investments placed in service during 2014, up to $500,000. Without the extension, the amount would have been $25,000. The bill also increases the number of companies eligible to take the write off by increasing the amount a business can invest in equipment, from $200,000 to $2 million.

The bill also extends the “bonus depreciation” through 2014, allowing businesses to write off 50% of capital investments in the first year. (Unlike Section 179 expensing, there is no limit on applying the bonus depreciation.) For more information, contact Eric Snyder at