One of the biggest burdens that’s often cited by small business owners every year is the ways in which they have to deal with huge tax burdens and take the time to figure out their liability in this regard every spring. However, it seems that one state may soon act to remove the roadblocks that many entrepreneurs feel is an impediment to their ongoing success.
Lawmakers in the state of Pennsylvania have recently put forth a number of proposals that would make it easier for small businesses to deal with their annual tax filings, as a means of encouraging more companies to begin operations within state borders, according to a report from the Pennsylvania Independent. One of the more notable bills now being considered would allow owners to deduct their companies’ net operating costs in the same way that larger corporations can. Another would significantly boost the amount that can be deducted for depreciation on large purchases in a single year by 300 percent, to $100,000 from the current $25,000.
Another would allow businesses or investment assets to change hands from one entrepreneur to the other without requiring them to pay taxes on them at that time, the report said. Some experts are hailing these changes as significant positives for the state of small business in Pennsylvania.
“If we reduce the burden that these small job creators face, we believe that we will generate more tax revenue because these small businesses will be more profitable,” Kevin Shivers, the executive director of the National Federation of Independent Business, told the newspaper.
However, other experts are quick to point out that these are not necessarily steps being taken to simplify the tax filing process, but rather additional tax breaks, the report said. This could be problematic for Pennsylvania as a whole because it, like many other states across the country, is grappling with something of a budget crisis, and taking potential revenues out of the tax base may be good for some businesses, but wouldn’t necessarily be a positive for the state itself.
Regardless of whether these bills pass, owners should also try to keep in mind that they can do things on their own to improve their bottom lines, such as by reducing costs for small business insurance. For example, finding more affordable commercial insurance coverage could help them cut expenses by thousands of dollars every year.