The U.S. House of Representatives last week voted 241-181 to pass the Tax Extenders Act of 2009 that included state and local sales tax deductions, a 15-year straight-line cost recovery for qualified leasehold and restaurant improvements, and the research and development tax credit.
In a letter sent before the vote, the Associated Builders and Contractors group expressed concern with provisions contained in the bill that would impact the construction industry. Specifically, ABC opposed a section regarding partnership interests transferred in connection with performance of services to raise revenue to offset the bill. According to ABC, some contractors enter into joint venture agreements where they are given partnership interest in exchange for having provided services to the partnership and will be negatively affected by the provision.
ABC offered suggestions for improving the tax relief for small businesses, including cutting capital gains taxes; repealing the estate tax, providing relief from the Alternative Minimum Tax; clarifying independent contractor status and cash accounting methods; offering a standard home office deduction; increasing the threshold for the completed contract method; and repealing look-back accounting requirements for construction firms.