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Where Small Businesses Might Get a Tax Break

The small business landscape is in a constant state of flux. The federal government, states and even local municipalities frequently change their rules, their incentives and the taxes they collect.

We mentioned previously that this changing environment sometimes makes things more difficult for small companies. A number of new rules and regulations in effect this year are affecting the cost of doing business, and how you go about it.

But in various areas of the country, help might be on the way – courtesy of city halls, state legislatures and other bodies. The following is a look at a few potential small business tax breaks and other helping hands that are being discussed across the nation.

Small Business Tax Cuts in New York

During New York Gov. Andrew Cuomo’s State of the State speech in January, he proposed a number of tax plans, including a huge break for small business corporate tax rates.

Those tax breaks might come in the form of A06309, a New York State Assembly bill brought about in 2019 that would amend New York’s tax law. Not only would small businesses’ taxes drop from 6.5% to 4%, but the corporate tax threshold for those companies would increase from $250,000 to $390,000.

The bill currently is in the state assembly’s Ways and Means Committee.

Philadelphia Could See a Little Relief

Philadelphia Mayor Jim Kenney recently announced both a proposed budget for fiscal 2021 and a five-year financial and strategic plan. The former will leave most tax rates alone, though it does include small cuts to both Philadelphia’s wage tax (which is the highest among the nation’s large cities), as well as business tax rates.

While business tax cuts are already scheduled, Kenney’s budget would accelerate those cuts in what would end up saving $200 million over a five-year period.

Tax Package Passes Florida House

The Florida House recently passed a wide-ranging tax package that includes breaks for individuals, families, small businesses and corporations.

Among the ways it helps small businesses is a 0.1-percentage-point reduction to sales taxes on commercial leases. Some Republican leaders in the state are looking to eliminate that tax completely.

The tax package also includes sales-tax breaks ahead of hurricane season and the upcoming school year. The bill likely will change somewhat, however, during negotiations with the Florida Senate.

Small Business Help for Coronavirus

The U.S. recently passed legislation that provides $8.3 billion in emergency coronavirus spending. That legislation includes up to $7 billion in low-interest U.S. Small Business Administration (SBA) loans.

“Under the bill passed today, the SBA could provide an estimated $7 billion in loans to help small businesses, nonprofit organizations and other entities, which have been impacted by financial losses as a result of the coronavirus outbreak,” according to a press release from Rep. Nydia M. Velázquez (D-NY), who co-introduced the legislation. “In addition, the bill provides $20 million to administer these loans.”

White House economic adviser Larry Kudlow also recently said that the White House is considering aid to small businesses and people unable to work because of the coronavirus, though he didn’t add any details.

Take Advantage of Existing Tax Breaks

If you’re a small business owner and you’re not up-to-date on latest federal, state and local tax laws, you’re far from alone.

But that’s where we come in. McManamon & Co. specializes in small and midsize businesses, and thus our tax services include not just taking care of returns and compliance, but proactively assessing your small business’s situation to make sure you’re positioned to reap all the tax breaks the code allows for.

You have plenty to deal with as you grow your small business – taxes don’t need to be one of them. Give McManamon a call at 440.892.9088 or contact us online today.

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