WASHINGTON, D.C., August 6, 2007—The Independent Insurance Agents & Brokers of America (the Big “I”) supports a bill introduced Friday in the House that would allow purchasers of eligible small businesses to depreciate as much as $5 million of acquired intangible assets over the course of a five-year period.
The bipartisan bill, the “Tax Fairness for Small Business Act,” introduced by Rep. Earl Pomeroy (D-N.Dak.) and Rep. Eric Cantor (R-Va.), two members of the House Ways and Means Committee, would provide a more accurate amortization of intangible assets acquired through the purchase of small businesses, thereby increasing the liquidity of Main Street businesses.
“The Big ‘I’ has been a longtime proponent of common-sense tax reform on intangible assets acquired through the purchase of one small business by another,” says Charles E. Symington Jr., Big “I” senior vice president for government affairs and federal relations. “We and our members are very pleased that Congressmen Pomeroy and Cantor are moving forward to provide tax relief to Main Street America’s businessmen and businesswomen, and we thank them for their work on this issue.”
Current law requires intangible assets to be depreciated over 15 years, even though these specific types of assets, such as customer lists, have much shorter shelf lives. In fact, experience has shown that these types of intangible assets have shelf lives closer to five years. The Big “I” consistently has supported shortening the depreciation schedule for these assets.
“Shortening the depreciation schedule would allow companies to amortize intangible assets more accurately after the purchase of another company,” says Jason Spence, Big “I” assistant vice president of federal government relations. “A shorter depreciation schedule also would allow Main Street businesses to reinvest more cash in their operations.”
Founded in 1896, IIABA (the Big “I”) is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.