Sen. Charles Grassley, R-Iowa, has introduced a bill to lower the tax burden on small businesses.

Sen. Charles Grassley

Grassley, ranking member of the Senate Finance Committee, introduced the Small Business Tax Relief Act of 2009. “My bill will leave more money in the hands of small business owners so they can hire more workers, keep paying the salaries of their employees, and make additional investments that will lead to new jobs,” he said in a statement.

The bill includes provisions that would:

• Increase the amount of capital expenditures that small businesses could expense from $250,000 to $500,000 to encourage businesses to invest in new equipment;

• Allow more small C corporations to benefit from the lower tax rates for the smallest C corporations;

• Take the general business credits out of the alternative minimum tax for those sole proprietorships, flow-throughs and non-publicly-traded C corporations with $50 million or less in annual gross receipts;

• Extend the one-year carryback for general business credits to a five-year carryback for small businesses;

• Provide a 20 percent deduction for flow-through business income for small businesses, which are defined as flow-through entities with $50 million or less in annual gross receipts;

• Lower the potential tax burden when a C corporation becomes an S corporation; and

• Expand the net operating loss provision contained in the stimulus bill, allowing small businesses with $50 million or less in gross receipts to get the benefit of the five-year net operating loss carryback.

“I hope this bill gets bipartisan support,” said Grassley. “Job creation is a bipartisan issue and really should be a non-partisan issue.”