HARRISBURG, (April 15, 2014) – The National Federation of Independent Business (NFIB), which represents 15,000 small businesses in Pennsylvania, today applauded lawmakers who have sponsored three bills to simplify the state’s tax code. Right now small businesses spend thousands of dollars hiring tax experts at an average of $74 dollars an hour. While business owners would much prefer to spend time expanding their business and creating jobs, instead they are burdened with hours of paperwork getting ready for Tax Day.
“If taxes are simplified, there is less paperwork and the need for tax experts is reduced it will allow small business owners to focus instead on growing their companies,” said NFIB Executive State Director Kevin Shivers. “That’s good for the Pennsylvania economy and ultimately for job growth.”
The sponsors of one new tax bill on like-kind exchanges are Sen. Mike Folmer (R-Lebanon) and Rep. Steve Bloom (R-Cumberland). Rep. Bloom says, “Small businesses create more than half of all jobs in Pennsylvania, but instead of encouraging them to grow, our outdated tax laws weigh them down with unfair rules and overly complex requirements. The reforms we are announcing today would replace several unnecessarily complicated tax obstacles with fairness and simplicity, so our small businesses can focus on growing the jobs our citizens need.”
Like-kind exchanges enable a business to sell their building or equipment and immediately purchase another property or buy more modern technology without a tax penalty. The federal government and every other state allow like-kind exchanges. Pennsylvania does not.
“As a former small business person I know the challenges these job creators face each and every day. The more we can do to get government off their backs, the better the chances they will survive and grow,” said Sen. Folmer. “Our current small business tax climate reminds me of the old Farmer’s Almanac quote: ‘If Patrick Henry thought that taxation without representation was bad, he should see how bad it is with representation.”
“Small businesses play an integral role in Pennsylvania’s economy and in our communities, and it’s in our best interests to help them grow and expand” said Sen. Scott Hutchinson (R-Venango). “I look forward to working with my colleagues in the Senate and the House to move the bills in this tax reform package through the legislative process and onto the Governor’s desk.”
Sen. Hutchinson’s bill, which is sponsored in the House by Rep. George Dunbar (R-Westmoreland), involves expensing and depreciation. If small businesses invest in expensive equipment the depreciation would be accelerated in the first year, but the overall amount paid to the state would remain the same. The cap would be increased from $25,000 to $100,000. That would help a growing business have the money on hand to invest in additional upgrades.
Sen. Mike Brubaker (R-Lancaster) and Rep. Seth Grove, (R-York) are sponsoring a bill that would mimic the federal tax code that allows a profit to be offset by a loss.
Sen. Brubaker said, “As Pennsylvania continues to weather our current economic storm, we must do everything we can to attract entrepreneurs and help current businesses grow in our Commonwealth. By allowing small businesses the same tax deductions as corporations, we are not only leveling the playing field but we’re helping our small businesses survive a slow economic recovery.”
“Tax day serves as a stark reminder of how burdensome and time consuming the current tax process is on small businesses,” Grove said. “This legislation I am working on with my colleagues will help improve the tax process, allowing Pennsylvania’s business men and women to spend more time building their companies and creating jobs.”