Currently, Entrepreneurs Can Only Write Off $5,000 In Costs When Starting A New Business. New Legislation Would Increase Tax Deduction To $50,000
A Recent Survey Found That Small Business Owners Spend An Average Of $40,000 To Get Their Businesses Off The Ground
WASHINGTON, DC – Today, during the start of National Small Business Month, U.S. Senator Jacky Rosen (D-NV), Senator Jeanne Shaheen (D-NH), and Senator Tammy Baldwin (D-WI) led a group of senators in introducing the Tax Relief for New Businesses Act, legislation to provide tax relief to entrepreneurs looking to start a small business and reduce barriers for startups. The bill would increase the startup tax deduction from $5,000 to $50,000, and allow businesses to write off more expenses to compensate for the increasing cost of starting a business. Currently, small business owners can only deduct up to $5,000 in startup costs in the first year, yet a recent survey found that they spend an average of $40,000 to get their businesses off the ground. Senators Rosen and Shaheen are members of the U.S. Senate Committee on Small Business and Entrepreneurship.
“We know that upfront costs are one of the biggest challenges that prevent entrepreneurs from starting a new business. That’s why I’m introducing this commonsense legislation to increase the startup tax deduction from $5,000 to $50,000,” said Senator Rosen. “Especially now, at a time of increased economic hardship and uncertainty, this commonsense legislation will help entrepreneurs in Nevada and across our nation pursue their dream of starting a business.”
“Small businesses are the lifeblood of the Granite State’s economy, but it’s getting more costly and difficult for local entrepreneurs to open up shop,” said Senator Shaheen. “Our commonsense Tax Relief for New Businesses Act would give entrepreneurs a helping hand up so they can succeed and fuel job growth.”
“Small businesses and the Wisconsinites behind them are the backbones of our local communities and our economy. For too many entrepreneurs, starting a business is too expensive and out of reach, and it’s our job to break down the barriers in their way so more Americans can pursue their dreams,” said Senator Baldwin. “Our tax code should incentivize entrepreneurs and support small businesses – not rig the system for the biggest corporations, like Republicans are trying to do. Our legislation is a commonsense step that will unlock opportunities for Wisconsin’s next generation of small businesses and help ensure they can grow, innovate, and shape the future of the Badger state.”
The Tax Relief for New Businesses Act is also co-sponsored by Senators Chris Coons (D-DE), Elissa Slotkin (D-MI), Ron Wyden (D-OR), Richard Blumenthal (D-CT), Ruben Gallego (D-AZ), Amy Klobuchar (D-MN), Martin Heinrich (D-NM), and Angela Alsobrooks (D-MD).
“Repeated research has demonstrated that new businesses – ‘startups’ – are a critical driver of economic growth, job creation, and opportunity expansion,” said John Dearie, President of the Center for American Entrepreneurship. “But launching a new business costs money. And because startup costs are incurred long before the first dollar of revenue, those costs can be a major obstacle to new business formation. That’s why the Tax Relief for New Businesses Act is so important. The legislation is powerfully pro-entrepreneurship, pro-growth, and pro-job creation. CAE thanks Senators Jacky Rosen (D-NV), Tammy Baldwin (D-WI), and Jeanne Shaheen (D-NH) for their leadership and looks forward to working with them to ensure swift passage of the legislation.”
“Starting a business is a vote of confidence in the future,” said Richard Trent, Executive Director of Main Street Alliance. “Men and women all across the country start businesses that help our communities thrive. Small businesses are connected to their communities, sponsoring little league teams, providing employment and creating a robust culture and economy. But one of the most difficult parts of starting a business is having the capital to do so. A lack of generational wealth, unfair lending practices and discrimination make this difficult for too many. The Tax Relief for New Businesses Act is a huge step in the right direction to level the playing field and jump start Main Streets all across America.”
“Small business owners face many challenges when it comes to starting a business, including sacrificing stability and financial security,” said Winnie Dowling, State Director of the Nevada Small Business Development Council. “Over 70% of new small business owners say that their greatest challenge is financing. Most provide their own investment and/or savings to get started. A tax break would allow new establishments to get their feet on the ground and generate revenues.”
“We applaud Senator Rosen for supporting Nevada’s entrepreneurs by reintroducing the Tax Relief for New Business Act,” said Mary Beth Sewald, President & CEO of the Vegas Chamber. “This bill will help spur economic development and job creation in our community by removing unnecessary barriers through increasing the tax deduction for these small businesses. This kind of legislation helps give entrepreneurs the flexibility they need as they start their business and also provides them another opportunity to succeed.”
“The Reno + Sparks Chamber of Commerce is enthusiastic about Senator Rosen’s bill, that if passed, would open doors to hundreds of entrepreneurs who dream of developing and owning a small business in our community,” said Ann Silver, CEO of the Reno + Sparks Chamber of Commerce. “The Tax Relief for New Business Act would stimulate commerce and enable our small business economy to be determined by those with the grit and determination to be successful.”
“This legislation aims to give entrepreneurs more financial breathing room, increase cash flow, and encourage investment in new ventures,” said Peter Guzman, President of the Latin Chamber of Commerce. “It will also make it less expensive and less complicated for someone to turn their business idea into reality. Together, these policies help to boost the economy, encourage job creation and keep Nevada business friendly.”
“The Tax Relief for New Businesses Act would help address the problem of excessive startup costs, which will expand opportunities for local entrepreneurs to launch their ideas,” said Former Assemblyman Cameron Miller, President of the Urban Chamber of Commerce. “The Urban Chamber of Commerce is proud to endorse this legislation to empower more Nevadans to achieve their dreams of owning a small business.”
“As Las Vegas’ AAPI communities grow and the dreams of being a business owner become a reality, the Tax Relief for New Businesses Act will reduce obstacles new business owners face during the startup phase,” said Ana Wood, Government Affairs Chair of the Las Vegas Asian Chamber of Commerce. “In a community comprised of diverse ethnicities, ensuring support for the Tax Relief for New Businesses Act is in the best interest of all Nevadans, including AAPI entrepreneurs and small businesses.”
“The AAPI Chamber of Commerce of Southern Nevada proudly endorses this bill, as we believe it will greatly enhance economic opportunity not only for the AANHPI community but for all small business owners throughout Nevada and the United States,” said Catherine Francisco, President of the AAPI Chamber of Commerce of Southern Nevada. “The proposed increase of the startup tax deduction will provide a crucial financial lifeline to entrepreneurs who often face overwhelming startup costs and will be particularly beneficial for minority and immigrant business owners, many of whom struggle to access adequate capital and resources when starting their ventures.”
As a member of the Committee on Small Business and Entrepreneurship, Senator Rosen has worked to support Nevada’s small business community. Every year, she leads her Senate colleagues in pushing for robust funding to support small businesses and cut burdensome red tape. Earlier this year, Rosen helped introduce the bipartisan Small Business Technological Advancement Act, which would allow small businesses to utilize the Small Business Administration loan program to finance technology that supports daily operations, including inventory management, product delivery, and accounting systems. Last Congress, Senator Rosen introduced the bipartisan Minority Entrepreneurship Grant Program Act to establish a Minority Entrepreneurship Grant Program through the Small Business Administration (SBA) to award grants to Minority Serving Institutions to promote and increase opportunity. She also introduced the bipartisan One Stop Shop For Small Business Licensing Act to require the SBA to create a centralized website that includes federal, state, and local licensing and business permit information for starting a small business.
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