Brooklyn's Progress
August/September 2007

BY JILL SHEEHY

While his Small Business Tax Relief Act of 2007 languishes on the Senate calendar, Congressman Charles Rangel can take solace that most of his suggestions were pushed into law by a wily Senate in the form of H.R. 2206 – otherwise known as the more verbose U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007.

President Bush, at odds with a democratic-controlled congress and trying to continue funding the war in Iraq, ended up passing a multitude of smaller, unrelated laws written into the funding bill. One such act raised the minimum wage to $7.25, which has been a point of contention for years, and another subtitle that called for a number of small business tax incentives.

Rep. Rangel’s bill made headway in the House over the spring, but was placed on the Senate calendar, which is akin to New Year’s Resolutions that you don’t keep. But thanks to some clever wording, the points were included on the Iraq funding law.

Included in the new law, which was signed by President George Bush in late May, were provisions for the following:

• Amended the Internal Revenue Code to extend the work opportunity tax credit through August 31, 2011, which gives credits for employees who live and work in a specified empowerment zone. Veteran wages eligible for credit was increased from $6,000 to $12,000.
• Extended and increased the expensing allowance for small business assets and extends such expensing allowance through 2010 to $125,000.
• Allowed employers to claim a business tax credit for social security taxes paid with respect to employee cash tips without regard to any increase in the federal minimum wage rate.
• Waived alternative minimum tax liability for the work opportunity tax credit and the tax credit for social security taxes paid with respect to employee cash tips.
• Now married couples who file joint tax returns who conduct their business activities as qualified joint ventures can do so without being taxed as a partnership.