Laws & Legislation


07 24 2015

Business Urge Congress to Increase Section 179 Tax Deduction

07 24 2015

Small-Business Owners Urge Congress To Increase Equipment Tax Deductions

One of the benefits of equipment leasing is the tax benefits it brings for small-business owners. Section 179 of the tax code lists leased equipment as an off-balance sheet operating expense, which lets owners write off the payments as a deduction. Since equipment in nearly every industry can be leased, it allows companies the opportunity to save money on operating expenses to implement growth initiatives.

Currently, the Internal Revenue Service sets the cap for this deduction at $25,000. For many companies, this isn’t enough to cover the constantly maturing and evolving technology needed to run the day-to-day operations of their businesses, let alone expand and enter into new markets. In an effort to increase this limit, The National Federation of Small Business organized a national fly-in campaign for small-business owners to descend upon Capitol Hill this week. Roughly 150 small-business owners will be meeting with members of the House and Senate to urge them to raise the Section 179 threshold to $500,000. By increasing this limit, owners would able to expense much larger major capital investments, allowing for more growth opportunities.

NFIB Policy Director Kevin Kuhlman spoke about the need for owners to directly communicate with Congress about these key issues.

“There is strong support for all of these issues on both sides of the aisle and our goal for the fly-in is to create some momentum for legislative action,” Kuhlman said. “Our policy team does a very good job of educating members of Congress on these issues but there’s no one better to explain how these policies affect small business than the people who have to live with them.”

Overall goals

The efforts to increase the deduction limit for leasing equipment comes as part of a larger effort to boost awareness about The Small Business Regulatory Flexibility Improvements Act. The act, which passed the House with bipartisan support, aims to reform the regulatory red-tape every business owner needs to navigate. According to Sen. David Vitter and NFIB President Danner writing in, there are 3,205 regulations companies need to comply with on a regular basis.

The SMRFIA would provide more channels for small-business owners to voice their viewpoints, gained from years of on-the-job experience, on what regulations work and which need to be fixed, like the leasing equipment cap.

In addition to advocating for increased deduction limits, the owners will be pushing for an amendment to the Affordable Care Act. The IRS currently disallows small-business owners the option of reimbursing employees for buying their individual health insurance policies. Owners and the NFIB are pushing to have this rule changed to allow employees the option of finding insurance outside their company’s benefits plan if they so choose.

Regardless of the lobbying efforts of the NFIB and small-business owners from around the country, companies need equipment leasing options they can rely on. Whether it’s $25,000 or $500,000 leasing equipment provides businesses with the benefits of significant tax deductions to help owners grow their companies.

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