These are the parts of the bill that directly impact car wash
businesses and other small businesses:
Provisions to Provide Access to Capital
General Business Credit Carried Back Five Years. Under
current law, a business’ unused general
business credit may generally be carried back to offset taxes paid in
the
previous year, and the remaining amount may be carried forward for 20
years to
offset future tax liabilities. This bill
extends the one-year carryback for general business credits to five
years.
This applies to general business credits
for those sole proprietorships, partnerships and non-publicly traded
corporations
with $50 million or less in average annual gross receipts for the prior
three
years.
Increase Small Business Administration (SBA)
Loan
Limits. This provision [permanently]
increases 7(a)
loan limits from $2 million to $5 million, and 504 [second lien] loans
from
$1.5 million to $5.5 million.It
increases the 7(a) Express Loans from $300,000 to $1 million to
increase
working capital to small businesses. SBA
has estimated that the loan increase would increase lending to small
businesses
by $5 billion in the first year.
Extend Elimination of Small Business Administration (SBA)
Loan Fees. This provision extends
through December 31, 2010 the American Recovery and Reinvestment Act
[ARRA]
small business lending program that eliminates the fees normally
charged for
loans through the SBA 7(a) and 504 loan programs and increases
the SBA guarantee
on 7(a) loans from 75% to 90%. Since its creation, ARRA has
supported over
$26 billion in small business lending, which has helped to create or
retain
over 650,000 jobs.
Small Business Lending Fund. The bill authorizes the
creation of the Small Business Lending Fund to provide Treasury with
the
ability to purchase preferred stock and other debt instruments from
[healthy] eligible
financial institutions with less than $10 billion in total assets.
Eligible
institutions include insured depositories, bank and savings and loan
holding
companies, and certain community development loan funds. Eligible
institutions
with less than $1 billion in total assets can apply to receive
investments of
up to five percent of their risk-weighted assets. Eligible institutions
between
$1 billion and $10 billion in total assets can receive investments of
up to
three percent of risk-weighted assets. Participating institutions
will pay a
five percent dividend rate on the preferred stock, but this rate can be
reduced
to as low as one percent if a bank demonstrates a 10 percent increase
in small
business lending relative to a baseline set using the four quarters
prior to
enactment. The dividend rate is increased to seven percent after
two years,
if the bank does not increase its small business lending. To encourage
timely repayment,
the rate increases to nine percent after four and a half years. capital investments under the program is
terminated one year after the date of enactment. This
provision is estimated to raise $1.1
billion over ten years.
Provisions to Encourage Investment
Increase of Section 179 Expensing and Expansion to Certain
Real Property. Under current law, taxpayers may elect to write-off the
costs of
certain tangible personal property that is purchased for use in the
active
conduct of a trade or business in the year of acquisition in lieu of
recovering
these costs over time through depreciation. For the taxable year
beginning in
2010, taxpayers may write-off up to $250,000 of these capital
expenditures
subject to a phase-out once these capital expenditures exceed $800,000.
After
2010, the thresholds revert to $25,000 and $200,000, respectively. This
bill
would increase the thresholds to $500,000 and $2,000,000 for
the taxable years beginning in 2010 and 2011.[Consult
your accountant for details.]
Extension of Bonus Depreciation. Businesses are allowed to
recover the cost of capital expenditures over time according to a
depreciation
schedule. Congress temporarily allowed businesses to recover the costs
of
certain capital expenditures made in 2008 and 2009 more quickly than
under ordinary
depreciation schedules by permitting those businesses to immediately
write-off
50 percent of the cost of depreciable property placed in service in
those
years. This bill extends the additional, first-year 50 percent
depreciation
for qualifying property purchased and placed in service in 2010.
Provisions to Promote Entrepreneurship
Increased Deduction for Start-up Expenditures. Under
current law, taxpayers may deduct up to $5,000 in trade or business
start-up
expenditures. The amount that a business may deduct is reduced by
the amount
by which start-up expenditures exceed $50,000. Start-up expenditures
are
defined as expenses paid or incurred in connection with investigating
or
creating an active trade or business, which would be deductible if paid
or
incurred in connection with the operation of an existing trade or
business. For
the taxable year beginning in 2010, this bill would temporarily
increase the
amount of start-up expenditures that may be deducted to $10,000
subject to
a $60,000 phase-out threshold.
Deductibility of Health Insurance for the Purposes of
Calculating Self-Employment Tax. Under current law, business owners are
not
permitted to deduct the cost of health insurance for themselves and
their family
members for purposes of calculating self-employment tax. This provision
would allow
business owners to deduct the cost of health insurance incurred in 2010
for
themselves and their family members in the calculation of their 2010
self-employment tax.