Cornyn, Conrad Introduce Small Business Tax Break

Press Release

Senators John Cornyn (R-TX) and Kent Conrad (D-N.D.) today introduced legislation to extend tax breaks to strengthen small businesses and help them through the economic recovery:

"Small businesses are the number one job creator in the country," said Senator Cornyn. "In this weakened economy, we must do everything we can to stimulate their growth through common sense tax relief and incentives to hire and expand. Our legislation will provide small business owners with the necessary tools to grow our workforce and help the nation make a full recovery from this economic downturn."

"We want to do everything we can to help strengthen our continuing economic recovery," Senator Conrad said. "Our legislation would encourage job growth in the commercial real estate and construction industries, both of which have been hit hard by the downturn."

Background

Specifically the bipartisan legislation will permanently extend real estate tax benefits for leasehold improvements in office buildings, restaurants, and retail spaces.

Leasehold improvements are the necessary alterations made to leased office and general commercial space by a building owner as part of a lease agreement with a tenant. These improvements can include but are not limited to interior walls, wiring, partitions, plumbing and energy efficient heating and cooling systems.

Under current law, the provision is temporary and must be extended annually. A permanent extension of the 15-year depreciation period for leasehold improvements will help building owners provide their tenants with more productive work spaces resulting in economic growth and increased job creation.

In 2004, Congress temporarily shortened tax depreciation recovery periods from 39 years to 15 years for certain leasehold improvements. That 15 year depreciation schedule is about to expire and reset at 39 years. In today's commercial real estate, restaurant, and retail markets, the 39-year depreciation schedule is unrealistic. Successful businesses in these areas must constantly make changes to keep up with the structural and cosmetic wear and tear caused by customers and employees.

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