Tax Bill 2 – How Would it Affect Small Business?

Date: April 30, 2014

They are at it again on a smaller, lower-caliber second tax bill that does contain a couple of provisions NFIB is closely watching.  The first one is a net positive that would significantly revise the June accelerated sales tax that retailers must pay ahead of time.  This provision, which is in both bills, completely exempts smaller retailers from having to pay the June accelerated sales tax and it is appreciated.  Those with gross annual sales taxes collected of under $120,000 are completely exempted from this nagging requirement that retailers have had to do for several decades now.  Under the provision, they must pay the sales taxes owed for June by June 28 and it has caused a financial hardship for some retailers over the years.  Sales taxes are normally due by the 20th of the following month.  This was passed long ago as an accounting gimmick/shift to give the state a little more money on their balance sheet at the end of the fiscal year.


The second significant provision in the bill is a property tax reduction proposal that unfortunately is a very mixed bag for small business.  The bill eliminates the state-wide commercial property tax on the first $150,000 on commercial property, but unfortunately causes an approximately $77 million shift onto all other businesses.  The proposal will help many small businesses that own their business property but will raise taxes/rents on small businesses that are tenants. 


This provision is only in the House bill and it’s unfortunate that they are picking winners and losers and causing a huge commercial property tax shift when we have a large surplus.  NFIB is urging the members of the tax conference committee to find a way to help all property owners when it comes to a reduction in the state-wide portion of the commercial property tax.  The state-wide commercial property tax accounts for about 20% to 30% of a business’s total property tax bill.


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