Us Congress House Bill HB2767

Us Congress 2023-2024 Regular Session

• Introduced: 4/20/23
• Refer: 4/20/23

Caption

Small Business Investment Act of 2023

Impact

The impact of HB2767 is expected to be broad, particularly for small business owners and investors. By providing a more favorable tax treatment of gains on qualified small business stock, the bill will stimulate capital inflow into small enterprises, promoting economic growth and job creation. Legislators anticipate that this will empower startups and small companies that struggle to compete with larger corporations when seeking funding. It may also lead to a more vibrant economic landscape as investors feel more confident in supporting fledgling businesses due to potentially higher returns on investments.

Summary

House Bill 2767, also known as the Small Business Investment Act of 2023, proposes significant modifications to the Internal Revenue Code specifically pertaining to the exclusion of gains from qualified small business stock. The bill aims to encourage investment in small businesses by gradually increasing the exclusion percentage from 50% to 100% based on the duration of stock retention, allowing for greater tax relief for investors. The proposal notably changes the holding period requirements from five years to three years, thereby promoting quicker returns for investors while still fostering long-term investments in small enterprises.

Contention

Notable points of contention surrounding this bill involve concerns regarding the potential revenue loss for state and local governments resulting from the extended tax exemptions. Critics argue that such incentives may favor wealthy investors or large firms under the guise of supporting small businesses, which could dilute the intended benefits of the bill. Furthermore, opponents highlight that a rapid transition from a five-year to a three-year holding period might lead to speculative investments that do not necessarily contribute to the stability or growth of small businesses in the long haul.