Four pieces of legislation and how they could help small business
This month in Congress is considered the lame-duck session, but small business owners have important priorities that have yet to be considered. Small businesses still face challenges such as inflation, workforce shortages, and supply chain disruptions, so this is an important time for pro-small business legislation to be passed.
“The NFIB Research Center’s latest Small Business Economic Trends survey reports small business owners expecting better business conditions over the next six months decreased to a net negative 46%, the sixth lowest reading in the 49-year history of the survey and the tenth consecutive month below the historical average,” VP of Federal Government Relations Kevin Kuhlman wrote in a letter to the U.S. House and Senate this week. “Before the end of the year, NFIB encourages Congress to consider legislation that provides promised tax relief, reduces tax compliance burdens, and protects small businesses from anticompetitive practices to ease the forthcoming uncertainty.”
Four priorities small business owners have voiced for the lame-duck session are:
- New Form 1099-K Reporting Thresholds
- Employee Retention Tax Credit Availability
- Credit Card Competition
- Competition in Digital Marketplaces
New Form 1099-K Reporting Thresholds
Early next year, small businesses and individuals are scheduled to receive millions of new tax forms as Third-Party Settlement Organizations (TPSOs). PayPal, Venmo, and online marketplaces that connect buyers and sellers must issue a Form 1099-K for transactions made by customers with $600 or more in annual gross sales this year. Previously, TPSOs were only required to issue a Form 1099-K for users with $20,000 in transactions and more than 200 transactions in a calendar year.
This increased reporting will further complicate the already-difficult tax compliance burden small businesses and individual filers face. NFIB urges Congress to repeal this anti-small business expanded tax reporting requirement.
Employee Retention Tax Credit Availability
The Employee Retention Tax Credit (ERTC) was created during the COVID-19 pandemic for small businesses who were able to demonstrate significant decline in gross receipts or were subject to a full or partial suspension of business operations due to a government order.
The ERTC was originally set to expire on January 1, 2022, but on November 15, 2021, the federal Infrastructure Investment and Jobs Act (IIJA) was signed into law. This bipartisan law includes a provision changing the ERTC’s timeframe to only apply for the first three quarters of 2021, and not the fourth quarter.
NFIB urges Congress to reinstate the ERTC for the fourth quarter of 2021 so that owners who were planning on using the tax credit will no longer face a retroactive tax increase. Hear from an NFIB small business owner about why this credit is important to Main Street.
Credit Card Competition
Small business owners operate on thin profit margins, which have been increasingly cut into in recent years as credit card “swipe fees” have increased. Small businesses do not have the market power to negotiate with large credit card companies on “swipe fees,” which have more than doubled since 2012.
NFIB urges Congress to consider legislation that will harness the power of competition to give small business owners real choices when it comes to credit card processing networks.
Competition in Digital Marketplaces
Big Tech companies which run online marketplaces like Amazon and Google engage in practices that are unfair to small businesses, which lack bargaining power and alternative choices. For small business sellers using marketplace platforms, competition between the operator’s own products and third-party sellers creates conflicts of interest and has been shown to lead to unfair business practices.
NFIB urges Congress to consider legislation that seeks to remedy conflicts of interests and ensure a level playing field for small businesses and users of platforms covered by the legislation. Hear from NFIB members who spoke at a briefing with the U.S. Senate.
NFIB sent a letter breaking down these small business priorities to the Speaker and Minority Leader in the U.S. House of Representatives as well as the Senate Majority and Minority Leaders. Click here to read the full letter.