Permanently Expands Section 179 of the U.S. Internal Revenue Code
WASHINGTON, D.C. – Last week, U.S. Senator Rand Paul introduced S.2350, the Full Expensing Act of 2015. This legislation would level the playing field for all U.S. industries by expanding and extending Section 179 of the U.S. Internal Revenue Code (tax code) to permanently allow businesses to deduct 100% of their business expenses within the year of purchase. According to the Tax Foundation, this simple tax reform will boost the gross domestic product (GDP) by 5.13%, increase wages by 4.36% percent, create nearly 900,000 jobs, and raise federal revenues by $121.3 billion.
Currently, under Section 179, businesses are able to deduct the purchase price of certain qualified business expenses from their taxable income. Section 179’s current deduction limits of $25,000 on purchases of up to $200,000 fail to reflect high costs in the agriculture, food and beverage, and manufacturing industries that make up the Commonwealth of Kentucky’s economy. Hefty startup costs and routine equipment purchases ranging from $35,000 to $400,000 per item continue to act as an unnecessary barrier for young entrepreneurs and aspiring farmers. Full expensing is a vital part of supporting small business and job creation.
“By eliminating the need for continual tax extenders and removing the complicated depreciation schedule, the Full Expensing Act will act to promote economic growth and capital investment and, ultimately, bring stability to our nation’s tax code,” Sen. Paul said.
Click HERE to read the legislation in its entirety.