WASHINGTON–Legislation aimed at easing the burden on a small business that acquires another business was introduced in the House on Friday.

The “Tax Fairness for Small Business Act,” also known as HR 3362, was introduced by Reps. Earl Pomeroy, D-N.D., and Eric Cantor, R-Va. Both are members of the House Ways and Means Committee.

Under the legislation, purchasers of eligible small businesses would be able to depreciate as much as $5 million of acquired intangible assets over the course of a five-year period.

Although the bill was introduced just before members of Congress left Washington for the August recess, it has already won support from the Alexandria, Va.-based Independent Insurance Agents and Brokers of America.

The IIABA “has been a longtime proponent of common-sense tax reform on intangible assets acquired through the purchase of one small business by another,” said Charles Symington, the group's senior vice president for government affairs and federal relations. “We and our members are very pleased that Congressmen Pomeroy and Cantor are moving forward to provide tax relief to Main Street America's businessmen and businesswomen, and we thank them for their work on this issue.”

Currently, intangible assets are required to be depreciated over 15 years. The IIABA argued that these assets, such as customer lists, often have much shorter shelf lives, and that the 5-year time period proposed in the bill is more appropriate.

“Shortening the depreciation schedule would allow companies to amortize intangible assets more accurately after the purchase of another company,” said Jason Spence, assistant vice president of federal government relations. “A shorter depreciation schedule also would allow Main Street businesses to reinvest more cash in their operations.”