Description:
As ordered reported by the House Committee on Ways and Means on February 4, 2015
H.R. 636 would amend section 179 of the Internal Revenue Code, which mostly affects small- to medium-sized businesses, to retroactively and permanently extend from January 1, 2015, increased limitations on the amount of investment that can be immediately deducted from taxable income. H.R. 636 also would index the limitations for inflation and expand the definition of property that qualifies for that immediate deduction.
Specifically, the legislation would permanently extend to $500,000 (indexed for inflation) the annual cost of property eligible for expensing under section 179. That change would allow firms to deduct immediately from their taxable income larger amounts of investment instead of spreading those deductions out over time. The benefit of the immediate expensing would phase out for total qualifying investment in excess of $2 million, indexed for inflation.
The staff of the Joint Committee on Taxation (JCT) estimates that enacting H.R. 636 would reduce revenues, thus increasing federal deficits, by about $77 billion over the 2015-2025 period.
Although enacting H.R. 636 would affect revenues, the provisions of the Statutory Pay-As-You-Go Act of 2010 do not apply to the legislation because it includes a provision that would direct the Office of Management and Budget to exclude the estimated changes in revenues from the scorecards used to enforce the pay-as-you-go rules.
JCT has determined that the bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.
