News From the
Committee on Small Business
Nydia Velázquez, Chairwoman

For Immediate Release                       CONTACT:  Alex Haurek; Duncan Neasham
November 5, 2009                                                   202-226-3636

House Extends Homebuyers’ Tax Credit, Net Operating Loss Provisions
Velázquez: Measures Will Provide Boost to Nation’s Small Businesses

WASHINGTON, D.C. —The U.S. House of Representatives today passed legislation extending and expanding two tax provisions important to small businesses. The bill, H.R. 3548, extends into April an $8,000 tax credit for first time homebuyers and provides a new $6,500 tax credit to help some existing homeowners who are interested in buying a different house. The legislation also continues a provision enabling firms that have suffered losses this year to receive a refund, now, for taxes paid during past, profitable years. Rep. Nydia M. Velázquez (D-NY), the Chairwoman of the House Committee on Small Business, said that extending both tax measures would provide a badly needed boost for struggling small businesses.

“Small businesses dominate the construction, realty and architecture fields and, as recently as last month, entrepreneurs testified before our Committee that the homebuyers’ credit has sparked considerable demand for their services,” Velázquez said. “For our economy to recover, the housing sector needs to come back. There has been progress in that area and extending the credit through April will help bolster our recovery as it gets off the ground.”

Velázquez also praised the bill for allowing businesses to carry back net operating losses for up to five years for losses incurred in either 2008 or 2009. In the American Recovery and Reinvestment Act (ARRA) of 2009, which was enacted in February, the net operating loss carry back period was extended from two to five years for tax years beginning in or ending in 2008 for small businesses with gross receipts of $15 million or less. The latest proposal allows all businesses to carry back net operating losses for up to five years. It also extends the provision so that losses incurred either in 2008 or 2009 can be applied against previous, profitable years.

“The Net Operating Loss language that was enacted through the Recovery Act has already given many small businesses a badly needed cash infusion, helping them meet payroll and reinvest in their operations,” Velázquez added. “With the economy still weak, it only makes sense to let firms carry back losses from 2009.”

Both the homebuyers’ tax credit and an expanded look back period for the Net Operating Loss (NOL) were included in the ARRA.  Earlier this year, the House Committee on Small Business held hearings looking into the importance of the homebuyers’ credit to small businesses and examining how tax provisions in the Recovery Act are assisting entrepreneurs. The legislation passed the House today by a vote of 403 to 12. It now heads to the President’s desk for his signature.

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