Are Tax Burdens Crunching Your Small Business?

By Maria Valdez Haubrich

How do you feel about taxes? How do they affect your business? A new study by IT trade association CompTIA polled more than 400 small businesses to see what these entrepreneurs thought about their businesses’ tax burdens.

The study found that an overwhelming majority of respondents believe tax compliance is especially challenging for small and midsize businesses because they lack the resources to easily comply with complicated tax laws. As a result, tax complexity costs small businesses time and money. Further adding to compliance costs, 15 percent of small and midsize businesses in the survey said they had been subject to a federal or state tax audit in the last ten years.

What areas of the tax code did small businesses say are most burdensome? Payroll taxes, the alternative minimum tax and employee retirement plans topped the list due to their complex compliance issues.

What would small and midsize business owners like to see changed in the tax code? Seventy-two percent said a reduction in payroll taxes would be important or very important to their business. Reducing the corporate tax rate and the capital gains tax rate were also cited as changes that would help small and midsize businesses.

“Small and medium-sized businesses are the job creators in this economy,” said Todd Thibodeaux, president and chief executive officer of CompTIA, in announcing the study. “Unfortunately many of these same companies are forced to divert resources away from operating their businesses toward complying with ever more complicated tax structures.”

While businesses of all sizes felt that the current tax code is burdensome and overly complex, they weren’t ready to change to an entirely new system. Instead, survey respondents supported simplifying the existing tax system.

Image by Flickr user James Morris (Creative Commons)

This entry was posted on Tuesday, November 22nd, 2011 at 6:00 am and is filed under Accounting and Taxes, Compliance, Small Business, small business. You can follow any responses to this entry through the RSS 2.0 feed.


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