Section 179 Expensing Extension Still Stalled in Senate

Earlier this year, the Senate Finance Committee approved a handful of tax extenders, including two-year reinstatement of the $500,000 section 179 expensing level for small businesses. Then the entire House approved permanent restoration of section 179 to the $500,000 level. But now the Senate committee’s proposed package has stalled in the full Senate, waiting to come up for a vote, reported FarmFutures.com.

Without higher expensing levels, farmers may make fewer equipment purchases. The provision itself allows farm businesses to take the full depreciation deduction of an item that meets certain specifications—in many cases machinery—in the current tax year, with a maximum deduction of $500,000 and a phase-out threshold of $2 million.

Without an extension, either in the form of a new bill or a provision in a tax package, the 2014 expense election has fallen to $25,000 and the phase-out to $200,000.

On Sept. 15, Senate Finance Committee Chairman Ron Wyden urged approval of the committee’s EXPIRE Act, which includes the two-year 179 extension, for the sake of business planning. Without increased expensing limits under Section 179, “Oregon wine makers…may be forced to choose between new equipment and hiring new employees,” said Wyden.

Meanwhile, permanent Section 179 expensing at the $500,000 level turned up in an omnibus jobs and economic growth package drafted by House Republicans and was passed on Sept. 18. S