Tax break comeback
A bill that would revive substantial tax breaks for small businesses is awaiting approval in the Senate. The House last week passed the Tax Increase Prevention Act, which among other things would raise to $500,000 the amount small businesses can deduct for 2014 purchases of equipment like trucks, machinery, computers and furniture. The deduction had fallen to $25,000 this year from $500,000 in 2013. Small businesses have until Dec. 31 to buy equipment and get it up and running to claim the deduction.
The bill also revives what's known as bonus depreciation, which allows companies of all sizes to deduct half the purchase price of various types of property, and depreciate the remainder over a period of three to 20 years. Bonus depreciation had expired at the end of 2013.
Small businesses will be able to use both deductions when buying equipment.
A defense spending bill Congress is expected to vote on this week includes sections aimed at helping small businesses win more federal contracts.
One of them, the Contracting Data and Bundling Accountability bill, requires the Small Business Administration to work with federal agencies on compiling data on contract bundling. In bundling, government agencies consolidate smaller contracts into one that's awarded to a large company, which is then supposed to award subcontracts to smaller businesses. Critics say many large companies don't follow through, and small businesses lose out on contracting opportunities.
Another part of the defense bill relaxes rules on contracting to allow women-owned small businesses to get a larger share of government contracts.
Pay late? Why not?
Although virtually all U.S. businesses believe suppliers should be paid on time, nearly three-quarters say late payments are a fact of life.
That's the finding of a survey of 102 companies by MasterCard and Basware, a payment network operator, about how they pay their bills. Forty-three percent of the companies said they had delayed paying suppliers during the previous 12 months to conserve cash.
When a company defers payments, it might not be because they're in a cash crunch. Nearly two-thirds said that when they delay paying, they use the funds for investment or other ways of making money.
Chicago pay raise
Workers earning the minimum wage in Chicago are getting a raise. The City Council last week approved a plan to increase the state minimum of $8.25 to $10 by July and then in increments of 50 cents and $1 until it reaches $13 in 2019.
Chicago joins Seattle in raising its minimum wage, and campaigns are underway in cities including Boston and Philadelphia to increase their minimums as well. States across the country have raised their minimums this year, either by legislative action or referendums in last month's election. Illinois voters approved a referendum that recommends an increase in the state minimum to $10.