By Jay Heflin - 05/28/10 10:00 PM EDT
The New Democrats on Friday urged House leaders to extend bonus depreciation through 2010 in legislation aimed at small businesses.
"We believe that an extension of bonus depreciation, which will allow U.S. employers to expense up to 50 percent of the cost of business equipment in the first year of its purchase, will help stimulate economic growth and encourage investment," the group wrote in a letter to Speaker Nancy Pelosi (D-Calif.) and Majority Leader Steny Hoyer (D-Md.).
The House has already advanced a small business package to the Senate that zeroes out capital gains taxes for smaller C corporations.
But with the passage of the so-called tax extender bill earlier today, tax-writers in both chambers are expected to re-focus on legislation that helps small businesses over the Memorial Day recess.
Earlier this week, President Obama called on Congress to pass legislation granting small businesses greater access to capital and providing tax incentives. Bonus depreciation is usually a part of the arsenal lawmakers use when providing relief to small businesses.
"New Dems called for an extension of bonus depreciation in 2009, and it was included in the American Recovery and Reinvestment Act," the letter states. "Without an new extension for 2010, American companies will face additional burdens in retaining workers and making key capital investments."
Senate Finance Chairman Max Baucus (D-Mont.) intends on moving a small business bill through his chamber, but the matter is complicated. Lawmakers there want some assurance that an agreement on the estate tax is within reach before moving forward on a small business bill. Last week, a possible deal on the estate tax fell through and key negotiators are not sure when another deal will be within reach.