Filing Frenzy: Tax Deadline Strikes Today

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.

 

 

House Committee Passes Bipartisan Federal Contractor Changes

By: Ann Sullivan, WIPP Government Relations

 

In its first major action of 2016, the House Small Business Committee approved changes to federal contracting which affect small companies who do business with the federal government. Acting in a bipartisan manner is relatively rare in Congress these days, but the Committee unanimously adopted the legislation, The Defending America’s Small Contractors Act of 2016, with over two-thirds of the Committee contributing content to the bill.

 

For the last three years, the House Small Business Committee has pushed for changes to the government’s buying rules and this week’s legislation was no exception. In our view, the following changes in the bill will prove to be significant to small contractors. One attacks an age-old problem – showing past performance without a government contract. The bill establishes a pilot program that enables contractors to receive a past performance rating by submitting a request to the contracting officer and/or prime contractor.  Second, the bill strengthens agency small business offices to recommend which small business set-aside programs should be used for each contract at their agency.

Anne CrossmanThird, WIPP’s recommendations were incorporated in the legislation, including one made by Anne Crossman, a member of WIPP’s Leadership Advisory Council, in her testimony before the Committee. Anne took the opportunity to highlight WIPP’s “if you list us, use us” policy for prime contractors’ subcontracting plans. This bill incorporates WIPP’s recommendations to clarify the role of commercial market representatives (CMRs) in encouraging prime contractors to work with small businesses. Lastly, the bill takes the first step toward getting a better handle on the actual amount set aside for small businesses by requiring agencies to divulge awards counted toward multiple small business goals.

An amendment offered by Rep. Takai scored a victory for women entrepreneurs by allowing Women’s Business Centers (WBCs) to provide procurement assistance to women participating in the DOD mentor-protégé program. Rep. Takai’s statement on the amendment is available here and includes WIPP’s statement of support.

These improvements set the stage for a productive year of improvements for small contractors. The bill, which passed unanimously, will now be considered by the full House of Representatives. The House Small Business Committee is off to a great start. We can’t wait to see what they do next.

From the Hill: Contractors Face Additional Reporting Burdens

By: Jake Clabaugh, WIPP Government Relations

hillFederal contractors will now face a bevy of additional reporting requirements when seeking procurement opportunities. The House Small Business Committee held a hearing Tuesday to exam the Fair Pay and Safe Workplaces regulations. These new rules are expected to be finalized late this year or early next year and require federal contractors to document and report labor law and safety violations for their firm and all subcontractors when bidding for contracts above $500,000.

WIPP supports efforts to rid the contracting environment of businesses with a history of abusive and neglectful violations, but these new rules will be particularly burdensome for small contractors. The House Committee hearing focused on the increased administrative burden that small contractors will face and how opportunities for small and women-owned businesses to enter the federal contracting arena will be affected.

WIPP addressed many of these issues in its official comment, submitted earlier this summer. The hearing highlighted the likelihood that contractors may be “blacklisted” from contracting opportunities, a concern that WIPP expressed. The regulations require all violations to be reported, even infractions that have yet to be adjudicated. The contractor is not afforded the opportunity for explanation until the contract is likely to be awarded. The danger is that a contracting officer will simply pass over or “blacklist” a potential contractor rather than dig deeper into nature and validity of the reported infraction. This could leave many upstanding small and women-owned firms with unproven or minor violations unable to secure contracting opportunities.

The hearing also stressed the duplicative nature of these regulations. Several witnesses noted how suspension and debarment procedures already exist. In its comments, WIPP recommended incorporating safe workplaces into the well-established system of suspension and debarment as an alternative to creating this enormous reporting burden.

These reporting requirements will impose significant costs for small and women-owned firms. Not only will it require the business to submit excessive documentation, it will also require significant resources to research, gather, and report the necessary information for the small business and all of its potential subcontractors.

Far from leveling the playing field for the millions of businesses playing already by the rules, these regulations will add to the tremendous burden facing small and women-owned businesses.