President signs installment sales bill

President Clinton this week signed legislation (see PIA hails repeal of 'stealth tax on small business') that reinstates the installment sales method for accrual-basis taxpayers. The Independent Insurance Agents of America (IIAA) called it "the best year-end news for independent agents and thousands of other small business owners."

Congress approved the measure the last day of the legislative session. Enactment of an installment correction measure was the number-one priority on Capitol Hill for IIAA in 2000, the agent group said.

As approved by lawmakers and signed into law by President Clinton, the provision repeals a ban on the use of the installment sales method for accrual-basis taxpayers that was enacted late last year as part of an omnibus tax and budget reconciliation measure.

IIAA says the ban had punished small businesses because it required immediate payment of all taxes, even if the seller was to receive installment payments over several years.

Edited by Dave Willis
Managing Editor, Property and Casualty
Source: IIAA