Now that the letter is out, it's time for everyone to send it to their Representatives and Senators directly.
Most Senators and Representatives have a contact form that you can use to email them. Some might have an email address on their site. On Congress.gov, you can use their Representative/Senator lookup tool and it provides the direct links for their contact pages.
Your time is well-spent doing this. Congressional staff are required to keep records of which bills constituents (i.e. people who live in their district or state) contact their office about. Staff report these tallies to their Representative/Senator and other staff.
Here's what you want to include in your email:
Many contact forms ask you to select a category. You can choose Small Business, Taxation, or another category—it doesn't matter all that much (all of their contact forms have slightly different categories). The most important thing is to include the bill number in the subject line.
Dear Representative (Name),
I am a small business owner located in (City, State). I am writing to you today to encourage you to support HR 2673, which allows for the immediate expensing of R&E expenses under Section 174 of the tax code. As a small software business, we are hit particularly hard by this change in the tax code, and as a result, we have [frozen hiring/started considering lay-offs/taken out loans to pay out taxes/had great uncertainty introduced into our cash flow/etc]. Please see below for a letter sent to Congress on April 18, 2023 from 597 small software business owners which provides more details on the impact of the issue.
Thank you
(your name)
The following letter was sent to the House Ways and Means Committee, the Senate Committee on Finance, Congressional Leadership, and the Chairs of the House and Senate Small Business Committees on April 18, 2023.
Dear Chairmen Smith and Wyden and Ranking Members Neal and Crapo:
We, the undersigned 597 small software business owners, are extremely concerned about the impacts of Section 174 amortization on our businesses. We are an informal coalition of small software companies, most with less than $10 million in annual revenue. We are located across the U.S. with signers in all 50 states and the District of Columbia. We ask that you immediately repeal Section 174 amortization retroactive to 2022.
In 2017, the Tax Cuts and Jobs Act (TCJA) modified Section 174 to require companies to amortize their research and experimentation (R&E) expenses over five years (15 years for international expenses) beginning on January 1, 2022. Among the various Section 174 expenses that need to be amortized are “software development” expenses, which represent a disproportionate amount of our expenses.
For decades, companies like ours could immediately deduct our R&E costs. We work hard to grow our businesses, yet changes to the tax code now stand to make that difficult, if not impossible. Requiring us to amortize our R&E expenses means shockingly higher tax bills than expected—hundreds of times higher in some cases.
These higher taxes are having a significant and immediate negative impact on our small businesses. We are now facing difficult choices because of the large, unexpected, and unprecedented tax liability that we face. For example, many of us have frozen hiring or suspended projects. Some of us are now considering laying off staff or reducing salaries. Others are borrowing to pay our taxes, either from credit cards, personal savings, or lines of credit.
Given that we are small businesses with limited access to additional funds, this crisis requires urgent relief. As small businesses, we can not wait months or years for a fix, and without swift Congressional action, some of us will need to consider closing our businesses or filing bankruptcy due to Section 174 amortization.
We are already encountering large economic headwinds without the impacts of Section 174 amortization, and now we are confronted with an unnecessary tax increase with no policy justification.
We urge you to quickly repeal Section 174 amortization to ensure that we can continue to not only operate our small software businesses but innovate, compete, and grow.
Sincerely,
[597 Small Software Companies -- see full letter at https://ssballiance.org/lettertocongress.pdf]
Dear Senator (Name),
I am a software developer located in (City, State). I am writing to you today to encourage you to support S. 866, which allows for the immediate expensing of R&E expenses under Section 174 of the tax code. As someone who works for a software business, I am concerned that this tax change will result in [layoffs at the business I work at/higher unemployment in the software industry] if R&E expensing is not reinstated and made retroactive to 2022. Please see below for a letter sent to Congress on April 18, 2023 from 597 small software business owners which provides more details on the impact of the issue and how many software businesses are now freezing hiring, laying off staff, or otherwise encountering financial difficulties because of this sudden tax increase.
Thank you
(your name)
The following letter was sent to the House Ways and Means Committee, the Senate Committee on Finance, Congressional Leadership, and the Chairs of the House and Senate Small Business Committees on April 18, 2023.
Dear Chairmen Smith and Wyden and Ranking Members Neal and Crapo:
We, the undersigned 597 small software business owners, are extremely concerned about the impacts of Section 174 amortization on our businesses. We are an informal coalition of small software companies, most with less than $10 million in annual revenue. We are located across the U.S. with signers in all 50 states and the District of Columbia. We ask that you immediately repeal Section 174 amortization retroactive to 2022.
In 2017, the Tax Cuts and Jobs Act (TCJA) modified Section 174 to require companies to amortize their research and experimentation (R&E) expenses over five years (15 years for international expenses) beginning on January 1, 2022. Among the various Section 174 expenses that need to be amortized are “software development” expenses, which represent a disproportionate amount of our expenses.
For decades, companies like ours could immediately deduct our R&E costs. We work hard to grow our businesses, yet changes to the tax code now stand to make that difficult, if not impossible. Requiring us to amortize our R&E expenses means shockingly higher tax bills than expected—hundreds of times higher in some cases.
These higher taxes are having a significant and immediate negative impact on our small businesses. We are now facing difficult choices because of the large, unexpected, and unprecedented tax liability that we face. For example, many of us have frozen hiring or suspended projects. Some of us are now considering laying off staff or reducing salaries. Others are borrowing to pay our taxes, either from credit cards, personal savings, or lines of credit.
Given that we are small businesses with limited access to additional funds, this crisis requires urgent relief. As small businesses, we can not wait months or years for a fix, and without swift Congressional action, some of us will need to consider closing our businesses or filing bankruptcy due to Section 174 amortization.
We are already encountering large economic headwinds without the impacts of Section 174 amortization, and now we are confronted with an unnecessary tax increase with no policy justification.
We urge you to quickly repeal Section 174 amortization to ensure that we can continue to not only operate our small software businesses but innovate, compete, and grow.
Sincerely,
[597 Small Software Companies -- see full letter at https://ssballiance.org/lettertocongress.pdf]
The following letter was sent to the House Ways and Means Committee, the Senate Committee on Finance, Congressional Leadership, and the Chairs of the House and Senate Small Business Committees on April 18, 2023.
Dear Chairmen Smith and Wyden and Ranking Members Neal and Crapo:
We, the undersigned 597 small software business owners, are extremely concerned about the impacts of Section 174 amortization on our businesses. We are an informal coalition of small software companies, most with less than $10 million in annual revenue. We are located across the U.S. with signers in all 50 states and the District of Columbia. We ask that you immediately repeal Section 174 amortization retroactive to 2022.
In 2017, the Tax Cuts and Jobs Act (TCJA) modified Section 174 to require companies to amortize their research and experimentation (R&E) expenses over five years (15 years for international expenses) beginning on January 1, 2022. Among the various Section 174 expenses that need to be amortized are “software development” expenses, which represent a disproportionate amount of our expenses.
For decades, companies like ours could immediately deduct our R&E costs. We work hard to grow our businesses, yet changes to the tax code now stand to make that difficult, if not impossible. Requiring us to amortize our R&E expenses means shockingly higher tax bills than expected—hundreds of times higher in some cases.
These higher taxes are having a significant and immediate negative impact on our small businesses. We are now facing difficult choices because of the large, unexpected, and unprecedented tax liability that we face. For example, many of us have frozen hiring or suspended projects. Some of us are now considering laying off staff or reducing salaries. Others are borrowing to pay our taxes, either from credit cards, personal savings, or lines of credit.
Given that we are small businesses with limited access to additional funds, this crisis requires urgent relief. As small businesses, we can not wait months or years for a fix, and without swift Congressional action, some of us will need to consider closing our businesses or filing bankruptcy due to Section 174 amortization.
We are already encountering large economic headwinds without the impacts of Section 174 amortization, and now we are confronted with an unnecessary tax increase with no policy justification.
We urge you to quickly repeal Section 174 amortization to ensure that we can continue to not only operate our small software businesses but innovate, compete, and grow.
Sincerely,
[597 Small Software Companies -- see full letter at https://ssballiance.org/lettertocongress.pdf]