Small Business Job Protection Act of 1996
The Small Business Job Protection Act of 1996 (Pub.L. 104–188, H.R. 3448, 110 Stat. 175, enacted August 20, 1996) is a United States federal law. It was sponsored by Rep. Bill Archer (R-TX) and it was signed into law by President Bill Clinton.
The stated intent of the bill is:
"To provide tax relief for small businesses, to protect jobs, to create opportunities,to increase the take home pay of workers, to amend the Portal-to-Portal Act of 1947 relating to the payment of wages to employees who use employer owned vehicles, and to amend the Fair Labor Standards Act of 1938 to increase the minimum wage rate and to prevent job loss by providing flexibility to employers in complying with minimum wage and overtime requirements under that Act."
Contents |
[edit] Effects of Act
[edit] 401(k)
The Act created a simplified 401(k) retirement plan to make it easier for small businesses to offer pension plans to their employees.
[edit] Adoption
A nonrefundable tax credit of up to $5,000 per child for adoption expenses and $6,000 for children with special needs was established. The Act bars placement agencies that receive Federal funds from denying or delaying adoptions based on race, color, or national origin.
[edit] Capital expense
The maximum amount claimed for capital expenses allowed by small businesses was increased by $7,000. The full amount was phased in over time.
[edit] Education tax incentive
Small businesses were allowed to exclude as much as $5,250 from an employee's taxable income for educational assistance provided by the employer. This incentive was through May 1997.
[edit] Minimum wage
The Act increased minimum wage in two steps, from $4.25 per hour to $4.75 effective October 1, 1996 and then to $5.15 on September 1, 1997.
[edit] Research tax credit
The Research tax credit had expired on July 1, 1995. This Act extended the credit through May 1997 but did not allow it to be retroactive.
[edit] Work opportunity tax credit
The Targeted Jobs Tax Credit was replaced with the Work opportunity tax credit.
[edit] FASITs
Section 1621 created the financial asset securitization investment trust (FASIT), a type of special purpose entity used for securitization of any debt and issuance of asset-backed securities.[1] In the Enron scandal, Enron used FASITs to avoid Subpart F rules on foreign income,[2] and because of their inherent abuse potential,[3] were repealed under section 835 of the American Jobs Creation Act of 2004.
[edit] References
- ^ Ferst, Joseph L.; Miyashiro, Milton K. (1999). "Federal Income Taxation of REMICs and CMBS". The Handbook of Mortgage Backed Securities (2nd ed.). Fabozzi and Jacob. p. 441.
- ^ Niskanen, William A. (2007). After Enron: Lessons for Public Policy. Rowman & Littlefield. pp. 306–307. ISBN 978-0-7425-4434-5.
- ^ Report of Investigation of Enron Corporation and Related Entities Regarding Federal Tax and Compensation Issues, and Policy Recommendations, United States Congress Joint Committee on Taxation, February 2003, p. 33
