I think it would help in Politics to be more precise defining small business. (Among other terms they use).
The whole argument on tax reform seems to center on small business taxes and job creation. Yet the stats on what defines a small business are pretty wide, like lots of sole proprietors (including myself) who file schedule C. I don't see myself as a small business really.
Maybe the tax code needs different rates and separate filings for business filers vs. individuals.
How would you define "small business"? And how should taxes work for them?
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Good question. Under 20 employees? Under one million in sales? Those sound like a good start. I am having to start do more supplier surveys and it is amazing to see how many of my vendors have less than 20 employees. America is really built on small business. Some of the machine shops I use have only 2-3 employees.
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That's a good point. I also am a sole proprietor and don't see myself as a small business. My idea of a small business is more in terms of our local businesses up here - Aspen Perk or Mountain Books or Haley's Closet for example. The local car repair shops and doctors' offices.
But where does one draw the line? If a small business is defined as, for example, 20 employees, what happens to that business that has 21 employees? And I'm just using that as an example - perhaps P&L or GL or inventory or whatever would be a better yardstick, but whatever measurement. That's a tough call.
SBA defines a small business concern as one that is independently owned and operated, is organized for profit, and is not dominant in its field. Depending on the industry, size standard eligibility is based on the average number of employees for the preceding twelve months or on sales volume averaged over a three-year period. Examples of SBA general size standards include the following:
• Manufacturing: Maximum number of employees may range from 500 to 1500, depending on the type of product manufactured;
• Wholesaling: Maximum number of employees may range from 100 to 500 depending on the particular product being provided;
• Services: Annual receipts may not exceed $2.5 to $21.5 million, depending on the particular service being provided;
• Retailing: Annual receipts may not exceed $5.0 to $21.0 million, depending on the particular product being provided;
• General and Heavy Construction: General construction annual receipts may not exceed $13.5 to $17 million, depending on the type of construction;
• Special Trade Construction: Annual receipts may not exceed $7 million; and
• Agriculture: Annual receipts may not exceed $0.5 to $9.0 million, depending on the agricultural product.
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