Budget & Taxes (Procurement · Small Business)

HR 354, the Small Business Growth Act, increases tax deduction limits for small businesses purchasing equipment. It raises the annual deduction cap from $1 million to $2 million and the phaseout threshold from $2.5 million to $3.5 million under Section 179 of the tax code. These changes directly affect small businesses that buy qualifying depreciable assets like machinery or vehicles, allowing them to deduct more of the cost upfront. The provisions apply to property placed in service after December 31, 2025, with inflation adjustments updated to reference 2025 and 2026.

This bill increases tax deductions for small businesses and manufacturers by raising limits on expensing equipment and assets. It permanently extends a business interest deduction rule and boosts the Section 179 deduction cap from $1 million to $2.5 million (with the phaseout threshold rising from $2.5 million to $4 million). The changes apply to property placed in service after December 31, 2024, and include inflation adjustments starting in 2025. These provisions directly benefit eligible small businesses and manufacturers by reducing their taxable income when purchasing qualifying equipment.