According to the study, SMBs wrestle with a number of costly and complicated tax provisions.
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
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.
Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.