Immediately following the July 4 recess, the Senate will consider a temporary extension of 100% bonus depreciation as part of the Small Business Jobs and Tax Relief Act of 2012 (S. 2237). In addition to extending bonus depreciation for new equipment purchased and placed in service in 2012, S. 2237 would also provide a 10% tax credit of up to $500,000 for new payroll in 2012 compared with 2011. That includes both the hiring of new employees and the increasing of wages for current employees.
The first and most difficult hurdle the bill must clear is on the motion to proceed to consideration. The cloture motion must get 60 Senate votes in order to prevent a filibuster of the legislation. Although there is bipartisan support for the bonus depreciation provision, opposition to the bill stems from its more than $20 billion price tag, which does not have to be offset because it is considered a tax cut rather than a spending increase.
This could be the last chance to pass a 100% bonus depreciation extension for 2012. Since the provision is intended to stimulate investment, the more time that passes, the less impact it will have on purchasing decisions and the less chance it has of being enacted. It is imperative that you contact both of your senators and urge support for cloture and passage of S. 2237.