Small Business Tax Relief on the Way

Yesterday the US Senate passed the "Creating Small Business Jobs Act of 2010"  Once reconciled with a House of Representatives version and signed into law by President Obama, the measure will provide the nation's small businesses with tax relief and greater access to credit markets.

Among the Act's significant provisions is modification of the Internal Revenue Code to encourage investment in small businesses by allowing investors to exclude 100 percent of the gains from the sale of certain small business stock from their income for tax purposes if the stock is held for more than five years. The legislation also would reduce the tax burden for small businesses by allowing them to carry back general business tax credits to offset their tax burdens from the previous five years.

Small businesses would also be able to count the general business credits against the alternative minimum tax. 

In addition, the legislation would establish a Small Business Lending Fund of $30 billion to provide capital investments to small community banks to increase small business lending.

The National Small Business Association applauded passage of the bill. "America's small businesses have been struggling for more than two years now," said NSBA president Todd McCracken. "This legislation comes not a moment too soon and will provide myriad avenues of help for small businesses."

The Kramer Law Firm is interested in feedback from small business owners regarding the expected effect of the new legislation on both short and long term business prospects.