I am not talking about holiday shopping. I am talking about “shopping” for your business. Last year, I like many individuals waited, and waited and waited for word about the expired tax extenders. Just in the nick of time, tax extenders were approved. Of course by that time many did not have time to shop.
This year, it seemed like there would be a replay of the scenario, kind of like that movie “Ground Hog Day” where the same thing keeps happening over and over again. I decided not to get caught up in the replay and began researching what equipment we would need over the summer. In the fall, I put in a new server, bought new computers, upgraded our firewall and bought necessary equipment. People asked why I was doing that not knowing if Section 179 expensing would make purchases a little less painful. It was simple. I could not wait to invest in the equipment that would keep my business competitive. We are constantly buying or updating equipment and the out-of-pocket expense is significant but it is also necessary.
Other business owners I know have taken a wait and see attitude as is evidenced by this Associated Press article. http://www.bigstory.ap.org/content/joyce-m-rosenberg For many the decision to invest is tied heavily to tax regulations. In my position as the Vice Chair of Advocacy for NSBA, I have received countless calls the past few weeks from business owners who are ready to open up their checkbooks.
Today there was good news about the Protecting American from Tax Hikes (PATH) Act of 2025. This is a potential bi-partisan deal that would make some tax extenders permanent and provide multi-year extensions for others. This is still subject to approval in the House and Senate but it is going to be taken up in the next few days. Hopefully, they will get it done before they leave for the holidays. If you want to learn more about this go to http://www.nsba.biz/?p=10565
Assuming that this passes, I believe it is a game changer for small business. To begin, I think it will help us return to the days when people actually did plan. We can be more thoughtful over a number of years about what we do rather than reacting to what might be attractive in the short term. It will encourage investment in our businesses and the tools and equipment our employees need to be successful.
The bill also has provision for extending the research and experimentation credit. The strength of small business is its ability to think creatively and innovate. In my home state of Michigan, companies that are now well-known started as small businesses. Among them are Ford Motor Company, Gerber Baby food and Herman Miller. By providing this credit we encourage the up and coming small businesses to follow suit. So is it time to start shopping? I hope so and we all need to stay tuned.