Leaders of the Senate Committee on Small Business and Entrepreneurship have introduced legislation that would make permanent the $250,000 Section 179 expensing limits for small businesses created under the Recovery Act.

Olympia Snowe

Committee chair Mary Landrieu, D-La., and ranking member Olympia Snowe, R-Maine, said the bill would help small businesses by allowing them to deduct up to $250,000 of the cost of qualifying property in the year it is purchased, rather than to recover such outlays through depreciation deductions over a number of years. Qualifying property includes machinery, equipment, vehicles and furniture.

“Small businesses continue to struggle as a result of the current recession, and many are having trouble finding capital to make job-creating new investments,” said Snowe in a statement. “Our bill will permanently allow small businesses to expense up to $250,000 of new investments, enabling them to acquire vital new facilities and equipment.”

The American Recovery and Reinvestment Act, which was signed into law in February, set the maximum amount that a taxpayer may expense in 2009 at $250,000. Subsequently, under current law, the maximum amount that may be expensed will be approximately $133,000 in 2010 and $25,000 in 2011. The Snowe-Landrieu bill would permanently set the maximum amount at $250,000.

Snowe has previously introduced legislation to raise the expensing limit to $200,000 in both 2007 and 2008. Both she and Landrieu successfully advocated for the language that was included in the ARRA.