Consistent and Predictable Business Deductions: State Conformity with Section 179 Deductions

Forty-five states and the District of Columbia (DC) allow first-year expensing of small business capital investment as permitted under Section 179 of the Internal Revenue Code. Twelve states and DC are out of conformity with current federal expensing limits, putting small businesses in their states at a competitive disadvantage. Now that the federal government has offered six-digit Section 179 allowances for more than a decade, holdout states are increasingly looking at raising state deduction limits or pegging them to federal allowances to remain competitive, less complicated, and growth-oriented.

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