The Senate has rejected a bill that would have brought back the bonus depreciation tax deduction for capital spending, a proposal backed by American Trucking Associations.
The bill would have allowed businesses to deduct the entire cost of capital equipment, including trucks, in the first year the business owns that equipment, instead of spreading it out for several years.
Bonus depreciation deduction was first allowed in 2010 as part of the economic stimulus, but it expired at the end of last year. The Democratic-backed bill rejected July 12 sought to bring it back for one year.
The bill garnered only 53 votes, short of the 60-vote threshold needed to pass in the Senate.
“There is no reason for [Republicans] to have killed this bill other than they are trying to hurt President Obama, small businesses and the middle class,” Senate Majority Leader Harry Reid (D-Nev.) told reporters after the vote failed.
Sen. Christopher Coons (D-Del.) proposed the bonus depreciation measure earlier this year (4-2, p. 3).
Democrats had added to the bill a provision that would have given a 10% tax credit to small businesses who hire additional workers, Reid said. The House has not held a vote on the bill.
The vote came two days after ATA sent a letter to senators encouraging them to support the bill.
“Due to the recent deep recession, from which our industry, like others, is still recovering, many small motor carriers remain cut off from access to capital needed to expand their businesses and purchase new equipment,” ATA President Bill Graves wrote in the July 10 letter.
“Our carriers are ready to put new capital to work, capital without which they will not be able to accommodate the increased freight movements that a recovering economy will generate,” he said.
The trucking industry is dominated by small businesses, Graves told senators. More than 90% of trucking companies registered in the United States operate fewer than seven trucks, and more than 97% operator fewer than 20 trucks, he said.
The proposal, known as the Small Business Jobs and Tax Relief Act, would have provided a “real stimulus” to trucking, Graves said.
The same day the Senate vote failed, it also voted down a competing Republican small-business tax proposal. That bill, which only received 24 votes, would have cut taxes by 20% for business with fewer than 500 employees.
The House passed that bill in April, but President Obama had threatened to veto it had it passed the Senate.
