Small business owners across the country are experiencing the highest inflation seen in over 40 years
NFIB State Director Annie Spilman will testify before the Senate Finance Committee on Monday, May 23, about the impact of surging inflation on small businesses in Texas.
In her written testimony, submitted in advance, Spilman said, “Small business owners across the country are experiencing the highest inflation seen in over 40 years.” Spilman will also share the results of a special NFIB Texas member survey about whether proposed tax exemptions would have an effect on their businesses. NFIB research shows that “inflation is controlling daily business decisions,” she said.
Read Spilman’s written testimony below:
May 18, 2022
Chairwoman Huffman and members of the Senate Finance Committee:
Small business owners across the country are experiencing the highest inflation seen in over 40 years. According to NFIB’s latest Small Business Economic Trends report, small business optimism marked the fourth consecutive month lower than the 48-year average. (NFIB began conducting its Small Business Economic Trends survey in 1974.)
Rising inflation has become a serious detriment for the small business community, and as the new data shows, small business owners aren’t expecting business conditions to ease anytime soon. Inflation is controlling daily business decisions.
The committee asked NFIB to share small business member input on the following charge: Examine Texans’ current tax exemptions and report on whether adjustments are merited because of inflation or any other factors. Unlike other organizations, our positions on public policy are driven by our members, not by a board of directors and certainly not by a single state director. So, we emailed a brief survey to our Texas members; this wasn’t a scientific poll but, rather, a general survey that allowed us to assess where our dues-paying members stand on this issue. We asked about the impact inflation is having on their businesses and employees and whether tax relief would be a factor in business operations:
- 53% of the members who responded reported utilizing tax exemptions for their small business.
- 71% of those said that an increase or broadening of tax exemptions would help them offset increased costs due to inflation.
- 52% of those said that the elimination of the tax exemptions would be a deciding factor in their business operations.
- The majority of the 52% said they would have to raise prices, and it would be a deciding factor in remaining in business at all.
We also asked our members to comment on the impact the proposed exemptions would have on their small businesses. Here is a sample of their responses:
- “ The removal or negating of either of these [exemptions] would be beyond devastating for our industry. We were TRULY the hardest hit industry by COVID. Virtually completely shut down by COVID for 15+ months, no takeout business, weekend hotel rooms nor weddings. Corporate and associations cancelled almost everything through four COVID waves for the better part of the past two years. Yes, if we had to lose these exemptions, it would be the final straw for many of us. Just too much to deal with when we are dealing with inflation, labor shortages and trying to rebuild and payoff the covid loans we took out to survive during the pandemic.”
- “ It would make it extremely difficult to compete with other companies in other states.”
- “Yes, we would have to completely reevaluate our business from each department.”
The survey also asked which types of tax exemptions, if any, the small businesses utilized. Written comments revealed that sales tax exemptions, agriculture exemptions, and franchise tax exemptions were the most used by these respondents.
Thank you for the committee’s time and attention to this important matter.
Annie Spilman, NFIB State Director, Texas