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U.S. NEWS A7
Wednesday 9 December
LIFE is Beautiful
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US Financial Front:
Small businesses in limbo as Congress debates tax break
JOYCE M. ROSENBERG have already used up the CE Rental co-owner Vicki Phaneuf poses for a photo at her party rental company in Raleigh, N.C.
AP Business Writer $25,000 deduction on a Small business owners are on edge as they wait to see if Congress will approve a big increase in
NEW YORK (AP) — truck and other equipment. the tax break they get to buy new equipment this year.
Small business owners are “It’s delayed our making
on edge as they wait to any purchases that weren’t (AP Photo/Gerry Broome)
see if Congress will approve absolutely necessary,” Vicki
a big increase in the tax Paneuf says. hard for them to get bank 2015 does turn out to be ment seller St. Joseph’s
break they get to buy new The Section 179 deduction, loans, says Lawrence Nan- $500,000, he can’t buy all Equipment are down 15
equipment. named for a provision in nis, a certified public ac- the necessary showcases percent to 20 percent this
The so-called Section 179 the federal tax law, allows countant in Waltham, Mas- to outfit it by the end of the year, and chief financial of-
deduction, which is aimed a small business to deduct sachusetts. Many also have year — the tax law requires ficer Sherry Wuebben says
at helping small business- up front the entire cost of money set aside for taxes equipment to be delivered the uncertainty about the
es grow, is caught up in a equipment ranging from in case they don’t get the and in use by Dec. 31 in Section 179 deduction has
debate over a number of computers to furniture to big deduction, and that’s order to qualify for the de- kept farmers from buying.
tax provisions. Lawmakers vehicles and machinery. money they can’t use to duction. And he can’t start “If they had known (a
are haggling over whether The deduction is $25,000, buy equipment. a search for a location un- $500,000 deduction) was
to raise the $25,000 de- but lawmakers vote ev- The owners of Hobby less he knows he’ll get the coming, they would have
duction to $500,000 for the ery year on whether to in- Works, a chain of four stores tax break. been visiting us,” says
current tax year only, or to crease that amount for the in Maryland and Virginia, “You can’t wake up in the Wuebben, whose com-
make the higher level per- current year. want to open more loca- morning and say, ‘I’m go- pany is based in LaCrosse,
manent for future years. Before the recession, the tions but have been sty- ing to open a store tomor- Wisconsin. Her company’s
If they can’t reach an deduction was fairly pre- mied because they can’t row,’” Brey says. equipment including trac-
agreement, the deduc- dictable; it rose to keep plan ahead, co-owner Small businesses that sell tors, combines and thresh-
tion would remain at the up with inflation. Con- Mike Brey says. equipment also are affect- ers ranges from $25,000 to
lower amount. Congress gress nearly doubled it to Even if the deduction for ed. Sales at farm equip- $500,000.q
had hoped to wrap up a $250,000 for 2008 to stimu-
$1.1 trillion spending bill late the economy during
that includes the Section the recession and kept it
179 deduction by midnight at that level for 2009. Con-
this Friday. But talks on the gress raised it to $500,000 for
bill have stalled and it’s each of the next five years,
not known when lawmak- but often lawmakers didn’t
ers might reach an agree- OK the larger deduction
ment. The inaction has left until December of each
small business owners like year. The House passed a
Vicki and Charles Phaneuf bill early this year calling for
in limbo. The couple wants the higher deduction, but it
to purchase $30,000 in stalled in the Senate.
chairs for their party rental Not being able to predict
company, CE Rental. But if the size of the deduction
Congress doesn’t approve from one year to the next
an increase in the deduc- makes it difficult for a small-
tion, they won’t be able business to plan for expan-
to afford them. The Pha- sion; many companies rely
neufs, whose company is on their tax savings to fund
in Raleigh, North Carolina, their growth because it’s
