04/20/2007
NFIB fights to prevent unfair taxation of small business
While most of the country is breathing a sigh of relief that tax season is finally over, small-business owners are heading back into the ring to fight tax proposals in state legislatures. And NFIB is right there out front, talking to lawmakers to ensure the burden from any new taxes implemented does not fall unfairly on the shoulders of the small-business community. The following are some of the tax proposals being considered around the country:
Arizona
Two tax-reduction bills currently in the Arizona Legislature would help the state's economy prosper. House Bills 2337 and 2336 would lower personal income tax rates by 5 percent for 2007, leaving small-business owners with more money to hire more employees and grow their businesses.
Speaking in support of H.B. 2337, Michael Crowe, president of Mesa-based Crowe and Associates and Leadership Council chairman of NFIB/Arizona said, "Most small businesses, such as sole proprietorships, partnerships, S-corporations and LLCs, pay their taxes through the individual income-tax code. The personal income tax is a graduated tax that imposes higher tax rates as small businesses grow and become more profitable. In the end, higher and higher tax rates make creativity and innovation more expensive. Tax cuts, on the other hand, will enable small businesses to grow."
Florida
The small-business community in Florida currently is in a major debate regarding property-tax reform, and NFIB/Florida has taken the lead in the fight to eliminate the state's tangible personal-property tax.
NFIB continues to support an exemption for the first $25,000 of equipment subject to the tangible personal-property tax. Both the House and Senate appear to be on board to adopt this key small-business provision as they work out different versions of reform. As negotiators work in conference over the coming weeks to develop a final package, NFIB will continue to encourage them to give serious consideration to a significant rollback to at least 2003-2004 levels, a cap tied either to inflation or a flat percentage cap, and to allow local governments to exceed the cap only by referenda.
NFIB members from across Florida descended on Tallahassee late last month for Small-Business Day at the Capitol, where they let lawmakers know that property-tax reform is at the top of the small-business agenda.
Idaho
Front and center on the NFIB/Idaho legislative agenda for 2007 is the elimination of the personal-property tax on businesses. Each year Idaho businesses are hit with a tax on their tools, equipment, furniture and other tangible items related to their operation. NFIB is fighting to eliminate this unfair tax, which essentially is double taxation for the state's businesses, as they already pay tax on such items when they initially are purchased. NFIB is working with a coalition of business groups toward the phasing out of the personal property tax to find a solution to help--not hurt--the business community.
Illinois
Small-business owners and advocates continue to hold rallies throughout the state in opposition to Gov. Rod Blagojevich's new budget plan, which includes a new tax on a company's gross receipts in order to provide health-care coverage for the uninsured. In addition to expanding the state's budget by $8 billion, the new tax on business revenue would be more than six times the state's largest increase to date. The plan would tax goods and services at every stage of production, and make Illinois-made products more expensive and less competitive in the marketplace.
Indiana
Over the next two weeks, the Indiana Legislature will be debating the issue of property-tax relief. Legislation up for consideration would shift more of the tax burden to the small-business community, as it proposes increasing the property tax for non-homestead property from 2 percent to 3 percent. While the Legislature argues that businesses would receive a tax break from other provisions included in the legislation, it has failed to consider that a large percentage of small-business owners file their taxes as individuals and would not benefit from such tax breaks as they are currently written. NFIB is encouraging NFIB/Indiana members to write their lawmakers and tell them to vote no on any bill that would hurt the ability of small business to grow their companies and create more jobs.
Michigan
The Michigan Legislature is debating various tax increases currently, including the decision of how to replace the state's main business tax, the Single Business Tax. This tax is scheduled to end at the end of this year, taking approximately $1.8 billion with it, and the Legislature is scrambling to come up with an alternative.
Additionally, the state is dealing with a budget deficit for the current fiscal year and a projected deficit for the coming fiscal year. Many are seeking a tax increase as a solution, which could potentially harm small business.
With so much up in the air, NFIB/Michigan is keeping an eye on the Legislature to watch for legislation that could unfairly tax small business. Stay tuned to www.NFIB.com/MI for the latest tax information.
Ohio
NFIB/Ohio Legislative Director Ty Pine testified this week before the Ohio House of Representatives' Ways and Means Committee in support of House Bill 3 and House Bill 4, two pieces of legislation that would reduce and/or eliminate the Ohio death tax. A survey released recently indicated that nearly 94 percent of NFIB/Ohio members support reducing or eliminating the state's death tax, and NFIB is working hard to meet that goal.
Vermont
The Legislature is currently considering a bevy of new state taxes, including a wind tax, taxes on home-heating fuels and gas-guzzling vehicles, and a new income levy to replace the property tax. NFIB/Vermont encourages members to contact their lawmakers and tell them that the state's small businesses are depending on them to stand up for small business by rejecting unfair legislation that threatens to tax them out of business.
What you can do
State taxes affect small businesses everywhere, and it is important that your voice is heard. Contact your lawmakers and remind them that unfair taxation only hurts your ability to help grow the economy, and you are counting on their support. You can also contact your NFIB state director for a listing of Area Action Councils or other ways to get involved with supporting your state's small-business agenda.
