ABC on Jan. 31 sent a letter to the chairman and ranking member of the Senate Finance Committee asking the committee to consider a permanent extension of certain tax provisions that are currently extended on an annual basis. The letter was sent in response to the hearing, “Extenders and Tax Reform: Seeking Long-Term Solutions.”
In the letter,
ABC noted that businesses were able to write off 100 percent of the costs of purchases of new equipment placed in service during 2011 through bonus depreciation. In a capital-intensive business such as construction, this creates an extraordinary incentive to invest in big-ticket items which otherwise would be cost prohibitive amid the economic adversity of the past several years. In addition, ABC noted that the increased ability to write off certain property under Section 179 expensing rules strongly encourages this type of equipment spending.
ABC also offered its support for the deduction of state and local sales taxes; the 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements; and the research and development tax credit included in the legislation to extend the expiring 2011 tax provisions. However, ABC also advocated for the 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements provisions be extended to include new restaurant construction.