The United States Senate approved the tax compromise “framework” for a two-year extension of the 2001 and 2003 tax cuts for all income levels, set to expire on December 31. The House of Representatives now must approve the legislation before it can be sent to President Obama to become law. The compromise, reached by the president and congressional republicans, includes a retroactive extension of the research and development tax credit through 2011, a two-year reinstatement of the estate tax at 35% after the first $5 million, a 100% write-off on capital expenses for businesses during 2011 (up from 50%) and a one-year reduction in the worker’s social security payroll tax from 6.2% to 4.2%.
Click here for a detailed overview of tax provisions important to SEMA member companies.
Unfortunately, the Senate missed yet another opportunity to repeal the costly 1099 reporting requirement from the health care law that was included as a revenue-raising provision within the health care law. The rule will require businesses to issue 1099 reporting forms to all vendors from whom they buy more than $600 worth of goods or services in any year, beginning in 2012. SEMA will continue to urge Congress to repeal the rule before it takes effect.
SEMA sent a letter of support to House and Senate members urging Congress to act quickly to enact the tax relief program. SEMA maintains that this important legislation will have a positive and noticeable impact on the economy and will provide many of the necessary tools for small businesses to remain the most important force in driving America’s economic recovery. For more information on these new developments, please contact Dan Sadowski, congressional affairs manager, at email@example.com.