United States Rep. Marilyn Musgrave (R-Colo.) recently held an official congressional hearing in Fort Collins, Colo., to investigate ways to help Colorado's small businesses grow.
Local residents, including Ron Lautzenheiser, a Big O Tire franchisee in Fort Collins, and tax experts testified on a bill Musgrave introduced in Congress on small business expensing, H.R. 1678.
"Allowing small business owners to immediately expense critical investments is key to sustaining economic strength," she said. "My bill extends these benefits for two additional years to provide greater stability for business owners, allowing them to better plan for the future, hire more people, and purchase equipment."
She was joined by Rep. Bob Beauprez (R-Colo.). "As a business owner, he understands the challenges small businesses face," she said.
"Recent economic reports have shown that our country's economy is in high gear and that Colorado's economy is clicking right along with it," said Beauprez. "I strongly believe that our current economic strength is due in large part to the common sense tax reform we recently implemented that has allowed businesses -- especially small businesses -- to invest more in themselves and their employees in order to grow their businesses and create jobs.
"Extending these tax breaks now to fuel further economic growth is not only the smart thing but also the right thing to do."
Lautzenheiser, who also owns two Grease Monkey Centers, supports the bill. "The current tax law signed by President Bush in 2003, which increased the Section 179 capital equipment write off limits to $100,000 in year one, was very instrumental in my decision to a start two new automotive centers in years 2003 and 2005.
"The purchase of new capital equipment allows me to produce a higher quality product or service usually with less repair and maintenance cost. It helps my business be more efficient and therefore more competitive in the market place," he said. "Section 179 helps me defray the cost of capital acquisitions because immediate tax savings leads to immediate reinvestment.
"Extension of the current deduction limits to 2010 will help alleviate my personal concern about the timing of capital acquisitions," he said. "Opening a new center usually requires real estate acquisition and construction. This is a lengthy process which starts two to three years prior to a center opening."
Section 179 of the Internal Revenue Code allows small businesses to deduct all or part of the cost of certain property and equipment in the year it is placed into service, rather than deducting its cost over several years. The IRS primarily allows small businesses such as sole proprietorships, partnerships and S-corporations to expense items such as machinery, equipment, furniture, fixtures, storage facilities, and single-purpose agriculture structures.
"Raising capital, particularly at affordable rates, is one of small businesses great challenges. It ranks right up there with the high cost of health care," concluded Lautzenheiser.
Musgrave is chairman of the House Small Business Subcommittee on Workforce, Empowerment, and Government Programs.
