Thursday, February 12, 2009

Congress Cuts Big Business Tax Break in Stimulus Bill


House and Senate negotiators all but eliminated the biggest tax cut for businesses in the compromise agreement on an economic stimulus bill, Senator Max Baucus of Montana said.

The provision, a top priority of business groups including the National Association of Manufacturers and the U.S. Chamber of Commerce, would let companies convert losses into tax refunds.

Baucus said today that the provision, under which companies could have claimed an estimated $67.5 billion in tax refunds this year and next, was sacrificed to help keep the final package under $800 billion.

“It was a casualty of the overall limit,” said Baucus, a Democrat and chairman of the Senate Finance Committee. Congressional negotiators announced today an accord on a plan totaling $789 billion.

The provision, which would have let companies of any size amend up to five years of tax returns to deduct net operating losses they realize now, had been Companies under current law can carry losses back only two years.

In its place, Baucus said, negotiators agreed to let small businesses with annual receipts under $5 million carry back losses for five years.

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