Many polls over the last several years have shown that when it comes to the overarching success of their small businesses, many entrepreneurs are concerned about the effects that the local, state, and even federal government has on their bottom lines. Between regulatory controls and taxes, it's a pressing issue, but where the latter is concerned, at least one state is looking to lighten the load for many companies for 2016.
While many owners in New York state may be concerned about the new $15 minimum wage, they're likely to get relief in another form: tax cut for small businesses, totaling some $298 million, according to a report from the Syracuse Post-Standard. The goal of these tax cuts, which will be included in the proposed state budget fully unveiled within the next few weeks, is to help more than a million small businesses statewide in a number of ways, with the biggest being a 15 percent deduction straightaway.
What else does that entail?
Beyond that initial tax cut, though, the new state budget would also include a reduction in the small business income tax rate to just 4 percent, though this would begin in 2017, the report said. That reduction would be available to small businesses with fewer than 100 employees and making less than $390,000 of net income.
That comes in addition to this year's corporate income tax rate cut, the report said. Starting this year, that rate will drop to 6.5 percent, down from the previous 7.1 percent, helping small businesses statewide save about $125 million annually.
Other issues still linger
Of course, there are some business experts who say that almost $300 million in annual tax savings probably doesn't do much to offset the financial issues raised by the increased minimum wage, the report said. Some estimates show that businesses (of all sizes) will pay some $15.7 billion more annually than they currently do as a result of the proposed wage hike.
"Tax reductions are always welcome in a state widely considered to be the among the highest taxed in the nation, particularly when they are targeted at the small and medium-sized employers that drive the Upstate economy," Greg Biryla, executive director of Unshackle Upstate, told the newspaper. "However, there are no tax relief plans that can offset the devastating impacts that a $15 minimum wage will have on Upstate businesses, taxpayers and consumers."
The state will also start a program that could be of tangential benefit to many small businesses, the report said. The 10 cities in New York state that can present the best plans for attracting young workers will be awarded $10 million in funds to help achieve those goals.
Small business owners who want their companies to succeed will also benefit significantly from developing a comprehensive financial plan, perhaps with the help of experts at a nearby community bank. By doing so, they may be able to put their best foot forward and succeed in ways they might not have expected.