NTF Issue Paper: cong153.doc. 10-18.

BACKGROUND. The first Trump tax cut bill helped Nebraska businesses, particularly small businesses. A new bill, third in a series, the American Innovation Act, would additionally help businesses prosper in Nebraska with several provisions.

THE BILL. HR 6756, sponsored by Tax Policy Subcommittee Chairman Vern Buchanan (Fla.), would permit new businesses to deduct up to $20,000 in start-up and organizational expenses for firms with over $120,000 (up from $50,000) in expenses in the year incurred, if they meet specific qualifications. Expenses ineligible for deduction immediately would become amortized over 15 years. Presently, new businesses can deduct only up to $5,000 of initial start-up expenses, forcing them to write off the remainder over 15 years, therefore making it more expensive to begin a new business and needlessly hiking the cost of investing in new equipment, expanding current workspace, and constructing new facilities. Bill expensing would make it more affordable for new businesses to open and for older businesses to upgrade and expand operations, therefore creating more than 1.5 million new jobs and ability for employers to increase wages. HR 6756 would increase business ability to transfer other tax benefits, like operating losses and tax credits, to new owners. For start-up businesses, losses or tax credits that occurred in the 3-year period prior to the ownership change would not become subject to the Section 382 and 383 limitations, allowing the businesses to utilize the net operating losses and tax credits available in the year prior to the financing and change in ownership. In order to qualify, the trade or business must continue in business for at least 2 years following the change. This provision would apply to an active trade or business that begins after September 10, 2018.

RESULTS. This bill would help new entrepreneurs expand their businesses and increase innovation. Small business owners are reporting record increases in profits, wages, employment, and plans to expand. HR 6756 will lock in incredibly important provisions, so that our small businesses can continue to hire, invest, and grow in their communities.

TAKE ACTION NOW. HR 6756 would offer a needed boost to Nebraska businesses, especially small ones and new entrepreneurs eager to contribute to our state economy. Contact your representative today to co-sponsor and/or support this bill. Email netaxpayers@gmail.com for congressional office contact information and join the NTF Congress Watch Project.

Research, documentation, and analysis for this issue paper done by Nebraska Taxpayers for Freedom. This material copyrighted by Nebraska Taxpayers for Freedom, with express prior permission granted for its use by other groups in the NE Conservative Coalition Network. 10-18. C

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