House will consider small business tax bill Tuesday

The House on Tuesday will take up a $15 billion measure (H.R. 4849) aimed at providing tax incentives for small businesses.

The legislation allows a 100 percent capital gains tax exemption from the sale of qualified small business stock acquired between March 15, 2010 and Jan. 1, 2012, estimated to cost about $2 billion over 10 years. That is an increase from 75 percent as part of the stimulus plan. 

The House Rules Committee on Monday approved a closed rule meaning no amendments and one hour of debate, equally divided on the House floor on the Small Business and Infrastructure Tax Act. 

The measure limits the penalty for failure to disclose a reportable transaction to 75 percent of the decrease in tax; increases the tax deduction for business start ups from $5,000 to $20,000 in 2010 and 2011; extends the Build America Bonds program through June 2013; extends the exemption from alternative minimum tax treatment of interest on certain tax-exempt bonds through 2011 and excludes water and sewer private activity bonds from state volume caps.

The measure also extends the issuance period of Recovery Zone bonds for infrastructure bonds in economically troubled areas, provides forgiveness for small companies hit by penalties on transactions deemed tax shelters by the IRS and allows state housing agencies to trade in unused low-income housing tax credits for cash.