[Author: Will Rogers, 01.2016 | Keywords: Section 179, OSHA, Expensing]
There was a flurry of last-minute legislative activity during the final months of 2015. Here is a quick look at changes to Federal laws and regulations that will affect our members in 2016.
Section 179
In late December, Congress passed, and President Obama signed into law, the Protecting Americans from Tax Hikes Act of 2015. This act includes language dealing with the Section 179 expensing provision.
While our dealers and their customers had to wait almost the entire year for the legislation to pass, the package makes Section 179’s expensing provision retroactive for the 2015 calendar year and permanent for future years.
The bill also makes Section 179 permanent at the 2014 levels ($500,000 with a $2,000,000 phase out).
In addition, the act provides an extension of the bonus depreciation rules, also known as Section 168(k). It allows 50% depreciation in the first year for a qualifying asset when placed into service. The 50% bonus applies to tax years 2015 through 2017. In 2018, the bonus will be 40% and in 2019 the bonus will be 30%. The “bonus” allowance is in addition to the regular depreciation allowance provided for in
the code.
OSHA Fines About To Rise
Congress passed and President Obama signed into law the Bipartisan Budget Act of 2015 in early November. This act contains language that requires the Occupational Safety and Health Administration (OSHA) to increase proposed penalties for alleged violations for the first time since 1990. Section 701 of the Bipartisan Budget Act of 2015, directs OSHA to increase the proposed penalties by 82 percent. In addition, all future penalties will be adjusted for inflation.
Iowa and Nebraska dealers should remain extra mindful of any potential workplace safety violations, given the much greater exposure created by the Budget Act.
Expensing Gets Easier
In November of 2015, the Internal Revenue Service (IRS) raised the expensing threshold for tangible personal property from $500 to $2,500. Known as the “de minimis safe harbor,” the rule change allows businesses that made purchases that would normally qualify as a capital item, to directly expense items under $2,500 and no longer provide an audited financial statement.
Earlier this year, Congressman Rod Blum (1st CD-IA) introduced HR 3318, which provided for the increase in expensing threshold and subsequently petitioned the IRS to enact the change through the rule process.
Will Rogers joined others in Washington, D. C. to push for extending Section 179’s expensing provision. Pictured above from left to right: Will Rogers; Natalie Higgins – VP Government Relations & General Counsel; Congressman Collin Peterson; and Nick Sinner – President/CEO of the Minnesota – South Dakota Dealers Association.
About the Author
Will Rogers
For more than nine years, Will has advocated for our members on both the state and national legislative fronts and has led I-NEDA’s educational efforts. In his free time, Will enjoys “dabbling” in politics, gardening, spending time with his wife and daughter, and managing his ever-growing collections (U.S. postage stamps, beer cans, comic books…).