• Sen. Kerry’s Small Business Stimulus Package Includes Important Provisions for the Self-Employed 

• Internet Tax Moratorium Extended

• Senator Bond offers Small Business Amendment to the Economic Stimulus Package

Sen. Kerry’s Small Business Stimulus Package Includes Important Provisions for the Self-Employed 

The National Association for the Self-Employed has worked diligently to strengthen its relationship with several key members of Congress this past year, and the fruit of this labor is readily apparent in legislation currently being introduced. For example, Sen. John Kerry (D-MA), Chairman of the Senate Small Business Committee and Entrepreneurship, recently introduced “The Affordable Small Business Stimulus Act of 2001,” which addresses several key NASE issues. To assist small businesses during this time of economic distress, the proposed bill includes provisions that:

• Increase the expensing limitation for small businesses to $35,000 and the phase-out level, above which expensing is not allowed, to $350,000. Both the $35,000 and $350,000 limits would be increased annually for inflation beginning in calendar year 2003.

• Reduce the depreciation recovery period for computers or peripheral equipment from five years to three, and for software from three years to two. This change would be permanent.

• Make the health insurance expenses of the self-employed fully tax deductible in 2001, as opposed to 2003 (current law).

• Include the Single Point Tax Filing Act, which will simplify the tax filing process for employers by allowing the Internal Revenue Service and State agencies to combine, on one form, both State and Federal employment tax returns.

In his floor speech to the Senate introducing S.1676, Chairman Kerry acknowledged, “While the Finance Committee has recently reported a more general stimulus bill to the full Senate, that measure only contains a few items that will help small businesses, which are the lifeblood of our nation's economy, creating the majority of new jobs. As the Chairman of the Senate Committee on Small Business and Entrepreneurship, I believe that I have an obligation to do more for small businesses.”

The National Association for the Self-Employed will continue to work with Senator Kerry and his staff to make certain the voices of our nations’ self-employed and small business communities are heard in Congress. The NASE encourages you to get involved by writing your elected officials to support an economic stimulus package that will assist our nations’ 24 million small businesses. To make this task easier, the NASE has composed a pre-written letter on the subject that can be found in the Legislative Action Center . 

Internet Tax Moratorium Extended

The NASE has long advocated keeping the Internet as tax-free as possible and these advocacy efforts are paying off. Last week, the U.S. Senate passed the Internet Tax Nondiscrimination Act of 2001 (H.R. 1552), which will extend the Internet tax moratorium for two more years. Rep. Christopher Cox (R-CA) introduced the bill. H.R. 1552 would prohibit state and local taxes on Internet access and multiple taxes on Internet transactions. The legislation was passed by a voice vote.

Senators Michael Enzi (R-WY) and Byron Dorgan (D-ND) proposed an amendment that would have extended the ban on Internet taxes until December 21, 2005 while allowing states to develop a uniform sales tax system for Internet transactions. This controversial amendment was defeated.

The bill will be sent to the White House where President Bush is expected to sign it into law. Legislators will continue their efforts to negotiate with the states a uniform sales tax system that is fair to all businesses that do or do not utilize e-commerce.

Senator Bond offers Small Business Amendment to the Economic Stimulus Package

The National Association for the Self-Employed applauds the efforts of Sen. Christopher Bond (R-MO) to rectify the lack of small business-specific provisions in the economic stimulus packages created by Congressional leadership and the Bush Administration. Sen. Bond, Ranking Member of the Senate Small Business Committee, is offering an amendment (SA 2119) to the Senate stimulus package that consists of crucial small business provisions. 

According to Sen. Bond, “In truth, all the partisan rancor over the "Economic Security and Recovery Act of 2001" as well as the proposal offered by the Chairman of the Senate Finance Committee, Sen. Max Baucus, (D-MT), misses the point. Both plans are just plain anemic and far too weak to fortify the small business sector and help America's Main Street rebuild and survive the current economic slowdown. Simply put, the true needs of small businesses have been dismissed by the leadership, apparently with little regret,” For full text please click this link: http://sbc.senate.gov/republican/107press/nov1401.html

The Bond Amendment includes the following provisions:

• Increases the annual expensing limit under section 179 from the current $24,000 to $50,000 per year and an increase the phase-out limitation from the current $200,000 to $400,000.

• Allows software to qualify as property eligible for expensing under section 179. This is to become effective for property purchased or placed in service after December 31, 2001 and before January 1, 2004.

• Increases the deductibility of business meals from the current 50% to 100% which would be effective for expenses incurred after 9/10/2001 and before 1/1/2004.

• Increases the limits under section 280F to provide that a business can deduct up to a total of $25,000 during the normal 5-year recovery period for a business vehicle, which would be effective for vehicles placed in service after 9/10/2001 and before 1/1/2004.

For more information, please contact Kristie Darien, NASE Director of Government Affairs at kdarien@nase.org.