retailers as you know are small businesses in two thousand and eight retailers holiday sales which typically represent twenty five to fifty percent of their annual sales declined by two point eight percent during the past year consumer confidence hit its  lowest lowest level since records have been kept for the first time in a long history and are as is forecasting a decline in annual retail sales for two thousand and nine retailers lost eight hundred thirty five thousand jobs since the beginning of two thousand and eight retail sales for the past three months continue to show sharp year over year decline the tax proposal that would provide the most immediate and beneficial help to retailers that are struggling to survive is the five year net operating loss carry back in our past and or carried forward to offset tax obligations that arise in the future under current law taxpayers may carry losses back two years and forward twenty years although both the house and senate versions of the two thousand and nine economic stimulus legislation would have permitted all businesses except those that have received tarp funds to carry their losses back for five years the final version of that legislation permitted only businesses with less than fifteen million dollars in gross to carry back their two thousand and eight losses for five years this provision needs to be expanded so that the size of business is not a factor in limiting the benefit of the carry back it also should be extended to cover losses incurred in two thousand and nine because it appears that the sales decline for two thousand and nine will be worse than it was in two thousand and ten or a strongly supports twenty four fifty two bipartisan legislation introduced by representative richard neal and pat tiberi the chairman and ranking member of the select revenue subcommittee of the house ways and means needed source of cash for operations as businesses are struggling through this recession this problem can be illustrated stories of two of our smaller chain retail members to be able to qualify for loans from the small business employees and six thousand additional seasonal employees in the second situation a regional specialty operating for western predicts that it will close one third of its remaining stores if it does not get a cash  the committee appreciate having the opportunity to testify this morning i'm here today on behalf of the national biodiesel board the national trade association for the industry our membership produces a nubile high quality diesel replacement fuel that is readily accepted in the marketplace in two thousand and four the us produced twenty five million gallons of fuel last year that number rose to six hundred ninety million gallons by diesel tax incentives primarily structured as a one dollar per gallon blunder triggered when blended with petroleum is currently set to expire at the end of this year due to volatile commodity prices unfavorable market conditions difficulty accessing operating capital and uncertainty regarding federal policy u s biodiesel industries facing severe economic challenges the industry's viability and the nation's ability to reap the policy benefits associated with domestic biodiesel production will be seriously compromised at the biodiesel tax incentives allowed to lapse at the end of the year is difficult for small businesses and investors to make long term business decisions based on year to year extensions of the body so tax incentives a multiple year extension of the incentive is absolutely necessary to provide the certainty and stability that is needed in the marketplace and to be also supports a structural reform of the tax  restructuring the current wonder's credit is a production excise tax credit of equal value will streamline administration of the credit and promote tax compliance while preserving the liquidity of the existing incentive this reform proposals encompass an f fifteen eighty nine the biod tax incentive reform an extension act of two thousand and nine which has been introduced in the senate by senators cantwell and grassley representative palmer will be introducing the house version of legislation in the near future there are several shortcomings associated with the current lenders credit that would be remedied by restructuring the incentive is a production credit since biodiesel blending can trick multiple stages in the distribution chain it can be difficult to ensure that only qualifying few will receive the credit this also makes it difficult for both tax payers and the i r s to determine now if you think about that there's clearly no energy policy justification for the sort of transactions with that said the current lenders credit could still inadvertently allow for other potential abuses associated with the train shipment of fuel through the us and a change to a today to strongly urge this committee in congress to extend certain expiring tax provisions before and before the end of this year the fifteen year depreciation schedule for leasehold improvements restaurant improvements in new  construction should be extended is the tax provision which i'll focus my comments today however just want to touch on a couple other areas that are also very important one is about the deduction for charitable is about the net operating loss carry back five years into when we get in trouble in economic times you get those years doesn't dollars didn't come in like if you can carry that you can still make  restaurant tours this provision is made significant capital available for expenditures with the tax savings that result capital expenditures and remodelling translate into jobs in the rest of the economy as well as  an employment at the restaurant all of which are really needed right now when restaurants invest in construction and renovations throughout the economy before the economic downturn the restaurant industry spent more than ten billion dollars in two thousand and seven on construction of restaurant buildings according to the bureau of economic analysis every dollar spent in the construction industry generates an additional two dollars and thirty nine cents in spending in the rest of the economy and every one million dollars spent in the construction industry generates another twenty eight more jobs in this economy that means the restaurant industry construction spending two hundred thousand jobs two thousand in fact congress  construction have been included in various economic stimulus bills even during these difficult economic times some business owners are in the position to expand and grow their business in fact forty two percent of restaurant like me and my business partner are planning to make a capital expenditure for equipment over the next six months in our business montana mix and benson's right now we're planning to put on an addition we have those times on friday night saturday nights and sunday at lunchtime we have people waiting for twenty minutes to thirty minutes we got those customers we need to expand take care of those customers this fifteen year depreciation the end of this year so we have a short period of time to get the financing arranged get the building built and put in use depreciation doesn't start till the project is actually put into if it doesn't get done till january first then we'd be on the thirty nine year depreciat depreciation a year now for those first fifteen years out pay less taxes now but you pay more taxes later the same amount of taxes will be paid over the period of time so when you start out that's when the cash flow is paul and i am a small business owner that's what i do and i'm very proud of that on behalf of the national association for the self employed and the two hundred fifty thousand micro business owners represents i'd like to say thank you guys for your commitment to small business owners everywhere you guys really do make a difference i don't want to be overly dramatic today but i want to talk about commitment i've been fortunate enough to my association with the n a s to see the commitment of thousands of small and micro business owners both to their families and to their businesses i've also been extremely lucky to be able to see the commitment to those same families and those same small businesses from you today i'm here to ask you to continue that commitment i know you guys have a tough job with lots of challenges trying to help people trying to help the economy trying to find new ways to meet the needs of so many people and then trying to figure out some way to pay for it all i know that's not the tax code has always been an effective tool in helping you guys to meet those goals not just funding the government but encouraging or discouraging activities and actions and i believe congress as well but a number of those tools are scheduled to expire as we talked about bonus depreciation options increased expensing under section one seventy nine excel or a recovery period as mr french had talked about all of those things have been extremely effective at creating jobs for small business and have contributed greatly to the economic recovery that i believe is underway a commitment to small business that shouldn't come to an end so the real question today that we need to evaluate is whether or not we want to continue that commitment to small business the country finally seems to be seeing a light at the end of the tunnel taking away these incentives that clearly are making a difference seems to be the wrong signal at the wrong time not get spent my whole five minutes on talking about any one of those areas but i'd like to concentrate on just one and that's the alternative minimum tax exemption amount i want to talk about this one in particular because i think at the end of the day this cost really is levied almost exclusively at the small business guy the riginal idea behind the a m t was to prohibit the tax payers with the most resources at their disposal the wealthiest of americans from taking advantage of loopholes in order to avoid paying any tax at all however the effects of inflation the growth of earnings and expenses wasn't taken into account congress has recognized over time and adjusted the exemption amount to keep track with inflation but now that adjustment is scheduled to end if we allow that adjustment and then the tax burden for many americans who had no increase in earnings from year over year will be paying more tax immediately the same level of earnings but more tax penalty and why many would pay the extra tax simply because they live in a state with a higher than average income tax others would pay more simply because they have a larger than average family clearly that was not the intent of the when it began so many years ago and ending that provision now would punish the people that the original a m t provisions set out to  here's the real kicker even if the a m t system does not result in any additional tax it still has to be calculated allowing this provision what would force many americans to do the math even if they don't meet the test and end up paying any tax so the a m t requires a completely different set of rules of this committee particularly has continually promoted the simplification in the tax code here is a single topic that results in a completely new tax return a second tax return a second set of records a second tax liability and a second set of headaches the instructions to the a m t form actually says and i quote therefore you need to refigure i don't know that you already figured for the regular tax in some cases you may wish to do this by completing the applicable tax form a second time really two times now the very concept of having a second set of records a second set of tax forms a second set of calculations goes to the very heart of the need for simplification again even if no tax result from a system that requires elations is a tax in itself and worse it's a tax that doesn't even generate any money for the  treasury and without this increase exemption many more small businesses will be stuck in this trap so getting rid of the a m t altogether would be my first choice but that may not be an option at a very minimum the exemption amount that is included should be adjusted indexed to inflation and fall back should not be allowed now my most conservative point here is that the wealthiest of taxpayers will still be affected by the regardless of this exemption amount but those tax payers have had no real increase in earnings no other resources to call upon those are the small businesses and the individuals who will pay this price and i know that wasn't the intent of the and certainly not the intent as we consider these expiring tax incentives the bottom line  keep the commitment thanks again for the chance to be here and more importantly thank you guys for your commitment to small business thank you mr whole i mean i would like to address my first question to you for the first time to fifteen year  of impact i actually recently talking with of a small business member in montana who is putting in a one and a half million dollar improvement to the retail store that they own as a result of this provision and actually looking to maybe improve they've got a total of three stores or other two stores down the line unfortunately that would probably be something they have to do in two thousand and ten and cost is going to be a factor and if the cost goes back up to thirty nine years that's going to be very difficult to do in these in these times i will tell you though that when i talked to the vast majority of our retail members they have they have cancelled whatever plans they could cancel for projects in two thousand and nine because of their very slim earnings or loss situation as you know with all businesses but especially retail sales have been down so much that the business really are cutting back everything that's not essential now that builds up more pent up demand for improvements that must be made and that they are trying very hard to be able to make in two thousand and ten at least with some more of those projects on the line cost is going to be critical on i think consistent with some of the other panelists small business continues to have issues with access to credit so whether they are financing restaurant equipment or they're financing a franchise  whatever their challenge with whether they're a veteran or just like me still finding access to invest in their new ideas their new effort and their contribution to the economy is still difficult and when i look at the bonus depreciation items section one seventy nine limits the recovery period mr french talked about all those things seem to be tax common tax issues but i view those as credit issues as well because as mr frank said also that i agree with those those issues really are just timing issues they don't the deduction or the expense of an item over time puts the small business in a person in the position of more readily financing their new idea and again my it's my belief that's where the economic recovery comes from that's where the jobs come from and so having access to those tax incentives help with the credit issue as much as having the better rates at the bank even thank you   for most small businesses i think the uncertainty and that may be the same thing with so many tax issues not being able to plan not knowing exactly what's going to happen finding some permanent exemption amount whether that's five million  business and i would suggest that recovery did a lot of the things at least during this past year that are good for small business and how do we and i guess it asks how do you get the message out to your members of congress has stepped up at least in the very near term with the recovery act and a lot of these things already to make sure they didn't expire this year so they can continue on and hopefully during this year at least and if i guess my question  while i still would use on i'm not a p r person so apologize for that but i would still use the word commitment that's one of the things i talked about in my oral comments and i think that's the word small business here think it's easy to say that word but when you pass things extending these type of things for investment in property for useful lives of equipment for the exemption and again that that represents a situation that only the people caught in that middle bracket are going to be affected if it's not extended passing those type of things i think says a commitment to small business and i think that's the way to communicate it to small business i think i'm sitting here in this chair and that's what i hear i hear commit to that but communicate back to your membership phone calls with people asking we tried to help them through it so we certainly do but i do want to stress that in this economy from the retail side obviously what all of our small business and large business members need is more consumer spending is seventy percent of g d p until the consumer comes back the economy can't come back and what probably is going to help the most with that we all know the answer is more employment at the employment numbers are making people who have good jobs afraid to go out and spend in our retail stores in the restaurants that are represented at the table with with with your members so we need to give them the confidence we need to do that to employment and so with that i  to also support expanding that and i will carry back for larger than fifteen million dollars in gross receipts i've talked about some not very big businesses today because of the slim margins in the retail industry you'd be surprised dahlkemper thank you madam chair and thank you i apologize for coming in late to have a hearing another committee to go to first but i hope i'm not actually repeating questions that were already asked but mr hall is part of the recovery act congress increased the a m t exemption to spare nearly twenty million taxpayers from the a m t liability and if we're unable to reach a deal on a m t how would lower the recovery process well  i again i think the key issue there is depending on estimates the original impact in about one percent of taxpayers and that was one percent by definition of the more wealthy taxpayers and i think that was its intent  recently estimates particularly in states like new york new jersey california have a higher state income tax as many as eight to ten percent of taxpayers are affected by a m t how many of those are small business owners again back to  my one of my original comments the thing that scares me most about the impact of this exemption on small business is all of them have to do the calculation anyway even if it doesn't have a revenue impact to the treasury still causes a drain on the small business because of having to go through the process but estimates have been as many as ten percent of small businesses will be affected by a m t and overall one out of five twenty percent would be affected by and again the biggest concern there for me back to your original question is is that is going to be tax out of their pocket that is money that they would be using to finance business investment and whether that's a dollar for dollar or that kind of changes their perception or their optimism on their future the uncertainty involved all those things put an optimism strain on small business which then translates back into lower investment so that's my real concern uncertainty but then also having the exemption amount being the only thing that's changed it's only go capture people in the lower income levels anyway which again wasn't the original of a m t to begin with thank you sir for i see the bio diesel industry is clearly facing challenging  challenges in the current economy but despite these obstacles i know you're very aware of the producer in my district like your bio field actually not change their name but they are finding a way to thrive in the really tough  that role in the marketplace of making price competitive with conventional diesel fuel and you have to have that especially in the absence of the best place right now to have consumers purchase the fuel and actually use it in the marketplace long period of time that you would see the production and then you would you would start to lose the production capacity in the country that we have built up since two thousand and four when put in place and that would be a real shame because we do have the