Major tax reforms become law
At the end of 2015, Congress passed and the President signed into law tax reforms for our industry:
Restaurant depreciation: Will permanently allow restaurant improvements and new construction to be depreciated over 15 years opposed to 39 years. This has been one of PRLA's top federal priorities for several years and we are pleased to see the change occur.
- Bonus depreciation: Normally, businesses recover capital investments through annual depreciation deductions. Bonus depreciation of 50 percent has been renewed through 2017 and retroactively cover 2015. These depreciations allow businesses to write them off more quickly.
- Section 179 expensing: Small business expensing in effect from 2010-2014 have been permanently extended and indexed for property placed in service during 2015 and forward.
- Work opportunity tax credit: This credit is extended through 2019 and will promote the hiring of individuals who quality as a member of a target group and will provide a tax credit to those businesses that hire these individuals. An employer can qualify for a tax credit up to 40 percent on the first $6,000 in wages and a 25 percent credit for short-term employees.
- Charitable food donation tax credit: This deduction is permanently extended. In addition, the deduction is increased from 10 percent to 15 percent of the taxpayer's AGI.