Year End Gifts for Small Businesses

Middle market companies generally benefited from year end legislation in 2015.  Distracted by the holidays, you may not have caught all the updates so I’ll try to highlight some here and offer links to helpful articles for more background.

In January 2016, the SEC issue adopted implementing regulations tied to legislation passed in December 2015, called the Fixing America’s Surface Transportation (or “FAST”) Act.

These SEC regulations have the effect of fixing or easing regulatory requirements to make it easier for smaller companies to raise public capital.

Pepper Hamilton, the law firm, released a helpful discussion of the regulations (Click here).  I’ve highlighted one important item below.  I recommend reading the Pepper Hamilton article, however, to review the full list.

  • Smaller reporting companies using S-1 filings may now incorporate by reference future SEC  filings.  This eliminates a substantial cost faced by smaller reporting companies (having non-affiliated “float” of less than $75 million) of filing registration statement supplements.

On December 18, 2015, President Obama signed into law the Protecting Americans from Tax Hikes (or PATH)  Act.  It makes many popular tax breaks permanent and extends others through 2016 or 2019.

This legislation includes several valuable tax breaks which Gumbiner Savett, the CPA and advisory firm describe here and here

A Bone for Grozzle

. I highlight one change likely to have wide application.

 

  • The ability to expense assets completely in the year purchased (called 179 treatment) was maintained at high 2014 year levels versus dropping in usefulness dramatically.  179 treatment, therefore, will continue to be a valuable tax item particularly for small and medium businesses.

Latham Watkins, the law firm, similarly, highlights a valuable tax provision, the permanent extension of the 100% capital gains exclusion for qualified small business stock and offers easy to follow definitions of what qualifies (Click here).

For more on the PATH Act benefits, Moss Adams, the CPA firm, is hosting a webinar.  Click here to register.