IT trade association CompTIA released a study that took a look at how taxes affect small and midsize businesses across the country, finding that overall, across both business size and form, opinions of the tax system were similar in one clear respect: An overwhelming majority of respondents noted that tax compliance is especially challenging for midmarket companies because they do not have the resources or scale to comply with complicated tax laws.
According to the study, SMBs wrestle with a number of costly and complicated tax provisions. Those surveyed cite payroll tax filings, alternative minimum tax requirements and employee retirement as some of the most difficult tax code provisions from a compliance perspective. This is especially worrisome because in the last ten years, 15 percent of midmarket businesses report being subjected to a federal or state tax audit, adding to tax compliance costs.
"Small and medium-sized businesses are the job creators in this economy," said Todd Thibodeaux, president and chief executive officer of CompTIA. "Unfortunately many of these same companies are forced to divert resources away from operating their businesses toward complying with ever more complicated tax structures. CompTIA is working on behalf of our members and in partnership with TECNA to address these issues head on and find solutions for small companies so they can thrive in a straightforward tax environment."
The survey found 72 percent of SMBs cite a reduction in payroll taxes as important or very important to their business. Respondents also cite corporate tax rate reduction and capital gains tax reduction as crucial federal tax code changes that would have a positive impact on their businesses. Regardless of size, respondents all feel that the current tax code is burdensome and overly complicated. Despite issues with the current tax code, members polled advocated for a simplification of the current system, as opposed to migrating to a completely new system.
"Simplifying the tax code, particularly payroll taxes for employees and employers, is a way to boost the economy," said Steven Zylstra, president and chief executive officer of the Arizona Technology Council, a TechVoice participant. "Instead of grappling with cumbersome tax issues, our members can get back to business. These changes would provide incentives for employers that can lead to job creation and economic growth."
Through CompTIA’s TechVoice grassroots network and a partnership with Technology Councils of North America (TECNA) and other technology organizations, CompTIA reached out to more than 400 small businesses to get an insider’s look at how these companies cope with their increasing tax burdens. CompTIA members will advocate for changes in tax policies, IT workforce development and an increase in access to capital for small companies during its legislative fly-in taking place in Washington, D.C.
To read the original eWeek article, click here: Small Businesses Support Tax Simplification: CompTIA Report