Category Archives: Tax

Filing Frenzy: Tax Deadline Strikes Today

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tax-day

By: Jake Clabaugh, WIPP Government Relations

Tax Day is upon us and woman business owners have been working overtime. Not on growing their firms, planning investments or making important hiring decisions, but on tax compliance. At least, that’s according the House Small Business Committee, which took a look at the burdensome tax.

Forgetting tax liability – the amount a business owes – the Committee focused on how difficult it is for small businesses to satisfactorily comply with dense tax rules. According to the Small Business Administration (SBA), small businesses spend 5.5 billion hours preparing and filing taxes – time that should be spent growing the business. The costs and complexity of calculating tax provisions makes it difficult for smaller businesses to take advantage of incentives designed to reward investment. As a result, larger businesses that can incur the costs of calculation reap the rewards.

As we’ve heard from WIPP members across the country, tax certainty is a top priority. Clarity on what provisions and incentives will be enacted would provide businesses with the ability to plan ahead, rather than adjust to a changing environment. For the last few years, Congress has passed legislation solely for “tax extenders” – deductions and credits that were set to expire at the end of the previous year, but were extended to cover the current tax year. While many of these credits could provide some relief for small businesses, firms spent the entire year without knowing if these provisions would be available. Hardly an efficient way to have to run your business.

A simpler tax code would reduce compliance time and allow owners to focus on their business – not the latest tax rules. Also, small businesses should be able to take advantage of the same incentives that larger businesses can. WIPP will continue to focus our advocacy on the two guiding principles of simplicity and fairness for women-owned businesses.

Could comprehensive reform – not seen since the 1980’s – be on the horizon? House Ways and Means Committee Chair Kevin Brady (R-TX) announced last week that his Committee is planning to release a tax-reform “blueprint” this summer. Additionally, Members of the House and Senate have stirred over international tax reform in the wake of recent corporate mergers. While the conversations are ongoing, comprehensive tax reform in an election year, with an ardently divided Congress seems, at least in our view, unlikely.

For updates on tax policy and other finance issues, please visit WIPP’s Economy and Tax section and WIPP’s Economic Blueprint.

 

 

Stop New Taxes on Internet Access

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internetThe Internet has revolutionized the way we communicate, learn, innovate and for business owners, it has been a game changer in their ability to manage and grow their businesses.  The Internet’s success and rapid growth is due in large part to a current law, the Internet Tax Freedom Act (ITFA), which has kept Internet access free from state and local taxes and fees since 1998.

We believe that Congress should act now and permanently extend the moratorium on taxing Internet access. ITFA is critical to keeping Internet access affordable for business owners and consumers, enhancing Internet adoption rates and growing the digital economy.

Finally, after much delay, it looks like the vote on a permanent version of ITFA could be as early as tomorrow! We need your help to urge your Senators support the Customs Bill and keep the Internet Tax Freedom Act in the bill. 

Urge your Senator to Support the Internet Tax Freedom Act!

With communications taxes on telephone services already on average at 17%, we don’t need the potential for another tax of close to 20% added to our Internet bills. In a time when our economy is still recovering, any money saved from the monthly bills of women-owned small businesses is much welcomed.

Tell your Senator to permanently extend ITFA today and keep Internet access free from new taxes.

Small Business Policy Index 2016

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Small Business & Entrepreneurship (SBE) Council released the 20th edition of its annual Small Business Policy Index, “Small Business Policy Index 2016: Ranking the States on Policy Measures and Costs Impacting Entrepreneurship and Small Business Growth.”

The Index ranks all 50 states according to various major government-imposed or government-related costs that have direct or indirect impact on entrepreneurship and business, as well as on start-ups and small growth eager companies.

The Index investigates in total 50 measures, from which:

  • 25 are tax related,
  • 18 relate to rules and regulations,
  • 5 focus on government spending and debt issues, and
  • 2 remaining measures deal with the effectiveness of important government undertakings.

The outcome is accessible through an interactive map displaying states’ ranking in color, with a summary per state provided after selecting a state.

Screen Shot 2016-02-08 at 1.15.31 PM

The most policy-friendly states to entrepreneurs under the “Small Business Policy Index 2016” are: 1) Nevada, 2) Texas, 3) South Dakota, 4) Wyoming, 5) Florida, 6) Washington, 7) Alabama, 8) Arizona, 9) Ohio, 10) Indiana, 11) Colorado, 12) Michigan, 13) Utah, 14) North Dakota, and 15) Virginia.

On the other side of the ranking we can find: 40) Maryland, 41) Maine, 42) Iowa, 43) Oregon, 44) Connecticut, 45) Vermont, 46) Hawaii, 47) Minnesota, 48) New York, 49) New Jersey, and 50) California.

The authors highlight several findings from the report, which are especially interesting to note:

  • Average real annual economic growth of the top 25 states’ was by 29.2 % faster than the average rate for the bottom 25 states.
  • Also, the top 25 states’ average state population growth of 4.9 percent from 2010 to 2015 was double compared to only 2.5 percent for the bottom 25 states.
  • The top 25 states also witnessed positive net domestic migration of a 2.00 million at the expense of the bottom 25 states, which lost 2.03 million people.

The SBE Council President and CEO Karen Kerrigan provides her explanation of the founded facts: “Policy matters for entrepreneurship and small business growth. Quite simply, when elected officials impose weighty tax and regulatory burdens, the increased costs and uncertainties mean reduced risk taking and less economic opportunity. The message from our ‘Small Business Policy Index’ to state officials is clear: If you are serious about helping small business, then reduce barriers to entrepreneurship and government costs imposed on small business.”

To access the Small Business Policy Index 2016 full report please click here.

House Committee Talks Taxes For Small Businesses

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BY: Jake Clabaugh, WIPP Government Relations

tax

If, like most small business owners, you have concerns about year-end tax planning, Congress may have a Holiday present for your business’ bottom line.

 

An agreement to reauthorize tax rules, known as “extenders,” could come before Congress adjourns for their Holiday recess. Extenders are temporary tax rules and require Congress to authorize their renewal. Extension of these provisions, although temporary, could save your business from significant tax liability.

 

For small businesses, these changes can have a tremendous impact. The House Small Business Committee held a hearing, “Employers of Choice: How the Tax Extender Debate Will Affect Small Business” on December 3 to discuss how the year-to-year renewal process impacts small firms. The hearing allowed members of the small business community to explain the importance of these tax rules and how uncertainty can negatively affect investments by small businesses.

 

Did your small business invest in any equipment this year? Then one tax extender that is important for your business is often referred to by its place in the tax code, Section 179, or simply as “Small Business Expensing.” This rule allows businesses to deduct the full cost of equipment purchased during the tax year, subject to certain conditions, instead of writing off portions of the purchased equipment over several years. If this provision is not extended, small businesses that made significant investments in equipment could face higher tax liability.

 

Last year, Congress agreed to reauthorize certain tax extenders for the 2014 tax year. For the 2015 tax year, negotiators in the House and Senate are still determining what tax rules to extend and for how long. A similar bargain is expected this year, but it is still unclear what provisions will be included.

 

For more information, please see WIPP’s advocacy efforts on the Economy and Tax.

Congress Temporarily Extends Internet Access Tax Ban – GUEST POST

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by Rob Schrum, myWireless.org

myWireless logoJust as time was running out, Congress passed a continuing resolution, which – among a handful of other provisions – will extend the ban on Internet access taxes through December 11th. As you may recall, the ban on Internet access taxes was due to expire on October 1st.
Earlier this year, the U.S. House of Representatives made a move to permanently extend the ban on Internet access taxes by passing the Permanent Internet Tax Freedom Act (H.R. 235). Unfortunately the Senate has yet to take up the companion legislation, known as the ‘Internet Tax Freedom Forever Act’ (S.431).
The ban on Internet access taxes was originally put in place in 1998 and incrementally extended by Congress over the years to encourage the continued expansion of Internet use. Last year, CTIA – The Wireless Association found that the decision to keep Internet access tax free led to more than $34.4 billion in savings for Americans – and that doesn’t even account for the benefits the Internet provides on how we communicate, learn and conduct business.
If the Internet access tax ban expires, the high state and local taxes that are already applied to wireless service could be expanded to include Internet access, increasing the cost of service. This despite the fact that the FCC National Broadband Plan says that cost is the largest barrier to consumer broadband adoption. We urge Congress to address this issue once and for all by enacting a permanent ban on Internet access taxes before the December 11th deadline. We can’t afford anything less.
View the original post at myWireless.org:  http://bit.ly/1LtinGf 

House Passes Permanent Internet Tax Freedom Act – GUEST POST

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by Rob Shrum, myWireless.org

Good news from the U.S. House of Representatives!

myWireless logoThe House voted to pass the Permanent Internet Tax Freedom Act (H.R. 235), which is strongly supported bipartisan legislation that permanently protects consumers from having to pay taxes on Internet access.

Now it’s time for the Senate to do the same. The Internet Tax Freedom Forever Act (S. 431), as it’s called in the Senate, is the companion to the bill passed by the House today.

The Internet Tax Freedom Act, as both bills are commonly known, was originally passed in 1998 to foster and encourage the continued expansion of Internet use in the U.S. As we all know, the Internet has revolutionized the way we are able to communicate, learn and do business. This legislation has been incrementally extended over the years, and is scheduled to expire October 1, 2015.

Please take a moment to write your Senators today and urge them to pass S. 431.

Let’s work together to make sure Internet access remains affordable and accessible to everyone, and tax-free forever!

See the original post at:  http://bit.ly/1NFX4DF

 

 

More Taxes? No Taxes? How About Fair Taxes

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By John Stanford, WIPP Government Relations

WIPP recently submitted testimony to the House Small Business Committee on comprehensive tax reform. This blog gives an overview of WIPP’s advocacy efforts. For more details, I encourage you to read the testimony. Our government relations team strives to make official communications as easy-to-read as possible, but should you have questions please reach out to WIPP.   

 

Women entrepreneurs deserve a tax system that rewards the effort, tenacity, and risk it takes to start and grow a business. Moreover, they deserve a system of revenue collection (because that’s what taxes are) that is simple and fair.

In testimony submitted to the House Small Business Committee, WIPP said just that. Citing reports from the IRS National Taxpayer Advocate as well as the SBA Office of Advocacy, the testimony documents what women business owners already know: the tax system is broken, failing under the weight of complexity, uncertainty and outdated policies. But more importantly, the testimony addresses the impact of possible reforms – and the need for any overhaul to be comprehensive.

What does that mean? It means that the idea to lower the corporate tax rate, favored by the White House and some in Congress, must not happen independently of adjusting individual rates in a similar manner. This distinction matters because so many businesses, including almost 9 in 10 women-owned businesses, are structured as “pass-through” entities paying taxes as individuals (including S-Corps, Sole-proprietorships, partnerships, and LLCs).

Corporate-only reforms would be unfair to these businesses – and for that reason WIPP has always supported comprehensive (corporate + individual) reform. The testimony underscored this important point.

In addition, WIPP identified tax policies that, absent major reforms, would benefit women entrepreneurs. This includes making more small business tax credits and deductions permanent. In recent years, these tax “extenders” have been extended (hence their name) at the last minute, or even retroactively – not a good way for business owners to plan their budgets.

WIPP also asked Congress to consider tax credits that benefit new businesses, helping offset the costs of launching a new company. Another policy request was to avoid changing the Employee Stock Ownership Plan (ESOP) provisions in the tax code, as these have proven to be both popular and good tools to incentivize productivity and long-term business health.

In agreement with the idea that simple businesses (sales – costs = income) should have simple taxes, WIPP also supports simplifying the cash accounting method and expanding its optional use to more small businesses. Finally, with healthcare costs an always-growing burden on employers, WIPP continues its support of expanding the Small Business Health Care Tax Credit so more women entrepreneurs minimize the cost of providing healthcare to employees.

More ideas for reforming the tax system to incentivize entrepreneurship and innovation are out there. WIPP will continue working to identify policies that let women business owners focus more on their business and less on complex tax requirements. At the end of the day, all of these decisions should be made with the basic principles of simplicity and fairness in mind. And that’s exactly what we asked Congress to do.