Congress completed the first half of the 114th Congress last week and went out of session for the rest of 2015…having passed a budget (and signed by the President) that should begin to make people more confident in the budget system on Capitol Hill…and getting back to the way Congress used to conduct its business – let me explain.
In theory – Congress must pass a budget (“appropriation”) for each federal agency (ie: the Department of Labor – the Department of Energy – the Environmental Protection Agency – etc). Years ago – the House and Senate would go through pain staking efforts to review, consider, amend, and pass each appropriation, following action by each respective authorizing committee – though tedious, it was the right way to responsibly work on budgets. In the last few years however, Congress has gotten away from that practice – passing stop gap budgets (“Continuing Resolutions”), in order to meet their budget obligations. This was done because issues (policy) tied to the appropriation process would slow down consideration – leading to government shutdowns (or the threat of a shutdown). I referred to this last month – as Congress was able to put a new budget road map together so that the appropriation process would take the pressure of the budget cycle. 2016 will be a much smoother budget cycle.
The budget that passed last week is getting Congress back to what Congress used to do, the way they used to do it, and what they should do. Specifically – Congress is getting back to order. That said – we (PHCC) had a few issues in play last week contained within the budget that was passed –
- 179 – Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. Although large businesses also benefit from Section 179, the original target of this legislation was much needed tax relief for small businesses. When your business buys certain items of equipment, it typically gets to write them off a little at a time through depreciation. In other words, if your company spends $50,000 on a machine, it gets to write off (say) $10,000 a year for five years (these numbers are only meant to give you an example). Now, while it’s true that this is better than no write-off at all, most business owners would prefer to write off the entire equipment purchase price for the year they buy it. This provision within the tax code was only temporary and Congress kept extending the section – which made it impossible for a business to anticipate what it needed to do. Last week’s budget makes this provision This chart illustrates how 179 works.
PHCC Chapters and members should be proud to have been part of making Section 179 permanent and for all the grassroots support over the last year
- 179D (not to be confused with 179) – The “Energy Efficient Commercial Building Deduction,” included in the IRS code is Section Enacted as part of the Energy Policy Act of 2005, this provision encourages building owners to increase energy efficiency in new and remodeled buildings by providing an immediate tax deduction for costs incurred which increase the energy efficiency of a building. Those costs would otherwise be generally depreciated over 27.5 or 39 years. Please note, this is a deduction, not a credit. This provision was extended for two years (one year retrospective for 2015 and one year prospective for 2016).
- Perkins Act – though there have been many attempts to cut educational programs in the budget – the Perkins Act was restored and received “level funding” which in essence restores the national programs original levels. PHCC will continue to fight for increased funding – but for now – this is a victory.
Many other policy issues were tied into this budget – from our standpoint though – these were the highlights.
2016 State Legislature Calendars
Quick reference for which states are in session or out of session in 2016 – and when
http://secure.naphcc.org/video/mark/doc009.pdf
Legislative Terminology
Just some legislative terms…it’s worth printing off for easy reference
http://secure.naphcc.org/video/mark/doc008.pdf
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