Past Small Business Issues

Issue Summaries for the 112th Congress

(Click here to view issue summaries for the current Congress.)

Reform or Repeal Alternative Minimum Tax (AMT):
The AMT attempts to ensure that anyone who benefits from certain tax advantages pays at least a minimum amount of tax. The AMT provides an alternative set of rules for calculating a taxpayer's income tax. These rules should determine the minimum amount of tax someone should be required to pay. If a tax payer's regular tax falls below this minimum, then he would have to make up the difference by paying AMT. In 2010 Pres. Obama signed approved a "patch" that revised the exemption amounts used in making the AMT computation for 2010 and 2011 (Tax Relief Unemployment Insurance Reauthorization and Job Creation Act, PL 111-312). Without the revised exemptions, an estimated 28 million taxpayers would have been hit by AMT-boosting their tax bills by an average of more than $6,000 each, and, collectively, an extra $136 billion in taxes. For tax year 2010, Congress raised the AMT exemption amounts to the following levels: $72,450 for a married couple filing a joint return and qualifying widows/widowers; $47,450 for singles/heads of household; $36,225 for a married person filing separately. The minimum AMT exemption amount for a child whose unearned income is taxed at the parents' tax rate has increased to $6,700 for 2010.'Pres. Obama's FY12 budget proposes a 3-year patch through 2014 to the AMT that is paid for by an across-the board 28% reduction in itemized deductions for high-income taxpayers. This proposal (the same level that was in place at the end of the Reagan Administration) will raise $321 billion over the next 10 years.
Status: Multiple bills have been introduced by Congress to fix or repeal the AMT.
AVMA Position: Support
Primary Contact: Gina Luke 


H.R. 682, Dependent Care FSA
Amends IRC to increase the contribution limits to dependent care flexible spending accounts and to provide for a carryover of unused dependent care benefits. The legislation would allow a maximum annual benefit of $3,750 ($7,500 for married couples filing a joint tax return) for a dependent care flexible spending arrangement; and allow a carryover of unused dependent care benefits in tax-exempt cafeteria plans and flexible spending arrangements into the next plan year. Currently employers determine the limits on FSA contributions, although a provision in the Patient Protection and Affordable Care Act (PPACA) will cap annual FSA contributions at $2,500 beginning in 2013, with adjustments for inflation thereafter. An FSA impacts taxable income -- if an employee earns $50,000/year and contributes $4,000 to an FSA for health-care expenses, they reduce their taxable income to $46,000. At a 25% marginal tax rate, that will save $1,000 in income taxes. As of 2010, about 33 million U.S. workers, or 20%, used FSAs.
Status: Introduced 2/11/11, referred to Committee on Ways and Means.
AVMA Position: Support
Primary Contact: Gina Luke  
H.R. 1004, Medical FSA Improvement Act
Removes the "use it or lose it" provision requiring flexible spending account (FSA) participants to spend their entire contribution before their plan's deadline or forfeit the remaining funds to their employer; replaces the requirement to forfeit unused funds with the ability to cash-out remaining funds and pay any applicable taxes on the amount withdrawn; eliminates the requirement that FSA participants obtain a doctor's prescription in order to use their accounts to pay for OTC medications, such as allergy medicine and cough syrup. This rule is a burden for consumers and physicians, since additional office visits are required to get an OTC medication prescription.
Status: Introduced 3/10/11, referred to Committee on Ways and Means.
AVMA Position: Support
Primary Contact:Gina Luke  
H.R. 1137, Small Business Credit Card Act  Amends the Truth in Lending Act to provide coverage for credit cards issued to small businesses. It extends the protections previously codified by the U.S. Congress to the credit cards used by America's small-business owners.
Status: Introduced 3/16/11, referred to Committee on Financial Services.
AVMA Position: Support
Primary Contact: Gina Luke 
H.R. 1180, Small Business Startup Savings Accounts Act
Amends the IRC to establish small business start-up savings accounts; businesses with 500 or fewer employees will be eligible to open a savings account; contributions to the account would be capped at $10,000 per year and the total value of these accounts at any one time would be capped at $150,000. As long as the money is used within five years of the first distribution, account holders do not have to worry about fees or penalties. Account holders could use the funds for the costs of business creation or expansion, such as the purchase of equipment or facilities, marketing, training, incorporation or accounting costs.
Status: Introduced 3/17/11, referred to Committee on Ways and Means.
AVMA Position: Support
Primary Contact: Gina Luke  
S. 364, Small Business Savings Account
Amends the IRC to provide for tax preferred Small Business Savings Accounts to pay for trade or business expenses, including operating capital, the purchase of equipment or facilities, marketing, training, incorporation, and accounting fees. Allows annual contributions to such accounts up to $10,000. Sets forth rules for the tax treatment of contributions to and rollovers from such accounts, similar to rules governing IRAs.
Status: Introduced 2/16/11, referred to Committee on Finance.
AVMA Position: Support
Primary Contact: Gina Luke  
S. 493/H.R. 1425, SBIR/STTR Reauthorization Act
Amends the Small Business Act to reauthorize the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs of the Small Business Administration (SBA) among other things.
Status: S. 493 introduced 3/4/11, referred to Committee on Small Business and Entrepreneurship. 3/9/11 reported with amendments and without written report. 5/4/11 passed by a vote of 52-44. H.R. 1425 introduced 4/7/11, sequentially referred to the Committee on Science, Space, and Technology, and in addition to the Committees on Small Business and Armed Services. Reported 5/26/11 as amended by the Committee on Science, Space and Technology H. Rept. 112-90, Part 1. 7./1/11 reported as amended by Small Business H. Rept. 112-90, Part 2. 7/1/11 placed on the union calendar.
AVMA Position: Support
Primary Contact: Gina Luke  
H.R. 1628 Plastic Bag Tax
Amends IRC to require retailers to pay a $0.05 excise tax on each disposable carryout bag provided to a consumer (exempts reusable bags). Allows a refund of such tax for retailers who establish a disposable carryout bag recycling program. Establishes a Disposable carryout bag Trust Fund to support land and water conservation.
Status: Introduced 4/15/11, referred to Commiees of Ways and Means; and Comittee on Natural Resources.
AVMA Position: No Action
Primary Contact: Dr. Mark Lutschaunig 


H.R 4032, Help Entrepreneurs Create American Jobs Act/ S. 2088 Small Business Start-up Support Act
H.R. 4032/S. 2088 would amend the Internal Revenue Code to make the increase (from $5,000 to $10,000) in the tax deduction for the start-up expenditures of an active trade or business permanent (currently, limited to taxable years beginning in 2010).
Status: H.R. 4032 was introduced on 2/15/2012 by Rep. Hank Johnson (D-GA-4th) and referred to the House Ways & Means Commerce Subcommittee on Health.  S. 2088 was introduced on 2/9/2012 by Senator John Rockefeller (D-WV) and referred to Senate Committee on Finance.
AVMA Position: Support
Primary Contact: Gina Luke  


E-tax fairness
The AVMA supports a fair and level playing field for small businesses whether they sell online or on Main Street. At present, online retailers have an unfair price advantage over bricks-and-mortar businesses. AVMA supports legislation to give states the authority to manage their sales tax laws while closing the loophole which prohibits states from requiring remote sellers to collect sales and use taxes owed on purchases from out-of-state vendors. The loophole created an uneven playing field for bricks-and-mortar retail businesses that face a price disadvantage and it led to budget shortfalls for states as sales taxes go uncollected.
AVMA Position: Support
Primary Contact: Gina Luke