U.S. Sen. Kay Hagan touted the importance of government support for small-business growth Friday morning at Mac’s Speed Shop.
Hagan, D-N.C., visited the South End barbecue hotspot to gain support for a bipartisan bill she’s co-sponsoring that would allow businesses to write off more of their commercial improvement projects each year.
“I hear too often from business owners that they’re putting off (improvements) because of uncertainty in Washington,” Hagan said. “We need to give them the certainty they need to … recoup their investments.
“… Small businesses like Mac’s are engines of economic growth.”
Hagan and Mac’s managing partner, Wynn Davis, 48, chatted in front of the polished bar while servers set out napkins and barbecue sauce on patio tables.
The bill would make permanent a 15-year depreciation schedule set to expire at the end of 2013. Here’s how it works: If a business like Mac’s invests in, say, new kitchen equipment, they’re able to write off its value over 15 years. (Each year they can write off one-fifteenth of the total.)
However, if the temporary measure expires at the end of the year, the depreciation law would return to a 39-year schedule. That means a business could write off only one-thirty-ninth of the total expense each year for 39 years.
But a new carpet or heating and cooling system most likely won’t last four decades. So a 15-year schedule better reflects the economic life of an investment, said Hagan, who is expected to seek a second term next year.
Making the depreciation schedule permanent would be a relief, Davis said. Mac’s has five locations in the Carolinas. He’d like to update equipment more regularly and is also considering opening another location.
“It would put more money in our pockets, so in turn, we’d say, ‘Why not grow?’ ” Davis said.
Most restaurant owners do significant renovations every six to eight years, said Whitney Christensen, government affairs manager for the North Carolina Restaurant and Lodging Association, who praised the bill.
“This is much closer to reality,” Christensen said.
Eligibility is based on the type of property and project, not business size. Nonstructural improvements are eligible for the write-off – for example, new flooring, new equipment, new heating and air. Retailers and restaurants are among the properties that qualify.
Hagan said giving businesses added incentive to reinvest in their infrastructure can create jobs for North Carolinians up and down the supply chain – from construction workers and electricians to plumbers, and even employees at home-improvement stores where contractors buy their supplies.
The short-term extension was part of last winter’s deal to avert the so-called fiscal cliff. It made the 15-year policy retroactive for 2012 and extended it through 2013.
McMillan: 704-358-6045Twitter: @cbmcmillan
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