House Passes Bill Boosting Write-Off Limits for Capital Purchases
June 13, 2014

The U.S. House of Representatives passed legislation Thursday that would make permanent a tax provision that allows farmers and other small businesses to immediately write-off up to $500,000 in equipment purchases rather than follow a depreciation schedule.

The Small Business Relief Act, which passed in a 272-144 bipartisan vote, would amend the Internal Revenue Code and make permanent changes brought about in the "fiscal cliff" bill.

The bill raises the threshold for Section 179 deductions on business expenses to $500,000, the same level seen in 2012 and 2013 but higher than the $25,000 listed in the permanent law of Section 179. This allows small business owners to take an immediate deduction on capital investments instead of following a depreciation schedule.

Legislation under consideration in the Senate would extend the tax provision by two years instead of making it permanent. The difference in approaches will likely slow down final approval, possibly until a lame-duck session after the November elections, according to Pat Wolff, senior director of congressional relations at the American Farm Bureau Federation.

Reprinted in part from Agri-Pulse