The National Federation of Independent Business has hailed congressional approval of legislation to repeal a controversial installment-sales tax law that has made it more difficult and costly for many small business owners to sell their businesses.
"This is a tremendous victory for small business and for NFIB," said NFIB Senior Vice President Dan Danner.
Bipartisan legislation to repeal the installment-sales tax law was approved by both the Senate and House of Representatives.
The legislation was the only stand-alone tax measure approved as the curtain dropped on the 106th Congress. President Clinton was expected to sign the bill.
The new provision first became a problem for small business owners when Clinton signed it into law on Dec. 17, 1999. The law required many small business owners who sell their businesses to immediately pay in one lump sum all capital gains taxes resulting from the sale, even if the sale’s payments were to be spread out in installments over a period of several years.
Under previous treatment, the capital gains tax payment could be spread over the life of the installment note.
NFIB estimates that the law could affect more than half of the 260,000 small businesses sold every year.
