SBA Tax Relief

Treasury / SBA Highlight Role of Tax Cuts During Small Business Financing Forum

US Treasury Secretary Timothy F. Geithner presided over the Small Business Financing Forum presented by the Treasury Department and the Small Business Administration (SBA) on November 18 in Washington, D.C. While the program was aimed at exploring financing issues, recent tax cuts were highlighted as a potential method by which the government could help small businesses increase their cash flow during the current tough economic environment.

Economic Stimulus Effort

The forum was part of the administration’s push to brainstorm ways in which the government could help ease access to credit for small businesses. “Without increased access to credit for American families and small businesses, growth will be weaker, companies will defer long term investments and we will not be able to create a recovery that is self-sustaining and led by private demand,” Geithner explained.

NOL Relief

In his opening remarks, Geithner highlighted the enhanced net operating loss (NOL) carryback rules under the American Recovery and Reinvestment Act of 2009 (the 2009 Recovery Act) (P.L. 111-5) for small businesses. These were recently extended to the 2009 tax year by the Worker, Homeownership, and Business Assistance Act of 2009 (P.L. 111-92). “We need to provide direct help to small businesses,” Geithner stated in his prepared opening remarks. “We’ve done that through the Recovery Act by establishing targeted tax relief to small businesses, allowing them to write off more of their expenses and to earn an instant refund on their taxes by “carrying back” their losses five years instead of two.”

New Markets Tax Credit

Additionally, Geithner pointed out that the 2009 Recovery Act enhanced the New Markets Tax Credit. Code Sec. 45D allows the tax credit for taxpayers investing in entities whose primary mission is to provide investment capital for low-income communities or persons. “The Recovery Act provided…an additional $3 billion in New Market Tax Credit investments to support small businesses as they spur growth in those struggling communities,” Geithner stated.

Continued Efforts

Despite some economists’ reports that the country’s recession may already be at, or will soon come to, an end, Geithner indicated that the Treasury will continue to prompt tax cuts that make small businesses more liquid. Nevertheless, the main focus of the forum was financing opportunities and Geithner stayed on message in that regard in his closing remarks: “No jobs without growth. No growth without credit.” He stated that President Obama would soon receive a conference report on the results of the forum, which would be publicly available for review.

Tax relief and tax controversy services by the tax firm of Mike Habib, EA at or at 877-788-2937

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