By the time President Obama signed the stimulus bill into law, we all knew the score: there was very little in the bill directed at small business. That, however, is not to say that there is nothing in the thousand-plus page bill that will help the small business sector. You just have to look for it.
You will find some tax breaks, some grants and some health reform money. Some of the money is aimed directly at small businesses, but a lot of it is work that small businesses will have to compete for, with other small businesses and with larger firms.
Tax Breaks. Small businesses with less than $15 million in gross receipts may now claim additional tax refunds. These businesses may use operating losses from 2008 and 2009 to shield taxable income from the previous five years. This is up from just two years. Tax breaks also play a big part in the government's green initiative. For example, all Americans may now qualify for a tax credit equal to 30% of solar-based renovations, which is a bid by the government to boost demand for solar-powered homes.
There are other tax-related provisions that could benefit small businesses. These include doubling the amount that small businesses can deduct on 2009 capital expenditures to $250,000 from $130,000; allowing businesses to immediately write-off 50% of the cost of new equipment purchased in 2009; and permitting some companies to defer taxes on certain types of business debt repurchased before 2011.
Grants. Federal agencies will have increased funding for small business start-ups through affiliated research efforts like the Small Business Innovation Research (SBIR) grants and Small Business Technology Transfer (STTR) program. Remember, while the research must serve the funding agency's mission, it can certainly have commercial potential. The government's greening efforts include grants of up to 30% of the cost of major commercial renewable energy projects such as solar-panel-covered rooftops and windmills. Federal buildings will get a green makeover.
In addition, small broadband providers will be able to secure a portion of the $7.2 billion earmarked for the expansion of broadband access and small battery manufacturers will be eligible for part of the $2 billion set aside for battery research and development in the hopes of pushing one or more of these companies to a technological breakthrough. Most of the broadband money, which is aimed at improving broadband service in rural areas, will come through grants from the National Telecommunication and Information Administration.
Healthcare Reform. Of the $787 billion in the stimulus package, $140 billion of it is going into healthcare initiatives, including $19 billion to install systems required to store and transfer medical records online, which is expected to give a boost to small technology firms.
Infrastructure. With $150 billion going for improvements in roads and bridges, the money being doled out to state and local agencies, this is a good time for small businesses in the road and construction trades.
The key here is this: The tax breaks are great and will help small businesses across the country, but if your business is in one of the industries directly supported by the stimulus bill, especially if you run a tech or construction firm, then with some research, effort and luck, you could find yourself lucratively stimulated.