On February 13, the House passed a $77 billion bill that allows small businesses, including multifamily firms, to permanently write off up to $500,000 in qualifying investments in the year of purchase. This expensing limit would be phased down if overall investment costs exceed $2 million - ultimately, limiting the proposal to smaller multifamily operators. Without legislation, small businesses can only immediately deduct $25,000 in investment costs in 2015.
This legislation now moves to the Senate and represents the first step in what is likely to be a long process to once again renew dozens of tax provisions that Congress extended last December through 2014. Several of these so-called tax extenders benefit the multifamily industry, including bonus depreciation, the flat 9 percent Low-Income Housing Tax Credit, incentives for energy-efficiency and the New Markets Tax Credit.
However, the Obama Administration opposes enacting permanent small business legislation that does
not include a revenue offset. So lawmakers may resort to their usual pattern of
waiting until later this year to send the White House a package that addresses
expired tax provisions for a period of just one or two years.
NMHC/NAA joined with a coalition of trade associations in a letter voicing support for the small business expensing bill and will continue to push for its enactment.
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- Sharon Wilson Géno Written Testimony on Behalf of the NMHC and NAA to the Senate Committee on Finance Hearing Entitled Tax Policy’s Role in Increasing Affordable Housing Supply for Working Families