Senators Say Accounting Change Would Hurt Small Business

Date: August 12, 2014

Switch To Accrual Accounting Would Increase Tax Burden

>Forty-six senators from 32 states signed a letter to the leaders of the Senate Finance Committee this week saying that a proposed change to accounting methods would hurt small business and should be dropped. The switch to accrual accounting from cash accounting could raise more than $23 billion in additional tax revenue over the next decade, but the senators say the change would be unfair and burdensome.

CFO Journal said the change would essentially require some businesses to pay income taxes on money they have not yet received, but anticipate in the future. Some businesses have said they would need to take out loans to pay the higher taxes. In their letter, the senators wrote, “Requiring more businesses to use the accrual method of accounting would create unnecessary complexity in the tax law and substantially increase compliance costs.”

Further Reading:

Accounting Today reports on the letter.


Find tips, resources and articles on small business banking, finance and accounting from NFIB's resource center.

Subscribe For Free News And Tips

Enter your email to get FREE small business insights. Learn more

Get to know NFIB

NFIB is America's leading small business association, promoting and protecting the right of our members to own, operate and grow their business

Find out more about
NFIB Membership

Or call us today



State Issues

Choose Your State


YEF Foundation Research Foundation Legal Foundation

Member Benefits