| |
Source: U.S. Sen. Kay Hagan (N.C.), 7/10/12
This week, the Senate is considering the Small Business Jobs and Tax Relief Act (S. 2237). The bill includes two key provisions that could create 27,000 jobs in North Carolina and nearly one million jobs nationally; the vast majority of these jobs would be created through small businesses. The Senate is holding a procedural vote this afternoon before a potential final vote later this week.
Why this matters for North Carolina
Small businesses are the engine of economic growth in North Carolina and around the country. In North Carolina, the Small Business Jobs and Tax Relief Act would create more than 17,000 jobs through small businesses and 27,000 jobs total. The bill would create jobs in some of North Carolina’s top industries, such as health care, finance, construction, manufacturing and retail. About the Small Business Jobs and Tax Relief Act:
1. Creates an Incentive For North Carolina Small Businesses to Add New Jobs This Year. Although the economy is recovering from a severe economic recession, a tax credit designed to stimulate job creation and wage increases could help put more North Carolinians back to work and provide tax relief targeted at our state’s small businesses.
This proposal would provide a 10 percent income tax credit on new payroll—through either hiring or increased wages in 2012. With a maximum increase in eligible wages of $5 million per employer and the amount of the credit capped at $500,000, the benefits of this tax credit will be targeted to North Carolina’s small businesses.
2. Extends 100-Percent Depreciation Deduction For Certain Property. Typically, businesses expenditures are tax deductible in the year in which they are made, except for major purchases (such as large equipment or buildings), which must be written off over many years. One hundred percent depreciation allows businesses to write off the entire cost of major purchases in the year they are made rather than depreciate those expenses over many years.
By accelerating in time the recovery of investment costs, “bonus depreciation” lowers the after-tax costs of plants and equipment. This encourages new investment and promotes economic recovery.
|
