In a letter to House Speaker Nancy Pelosi and Senate Majority
Leader Harry Reid, the Automotive Aftermarket Industry
Association (AAIA) commended Congress for passing the Small
Business Jobs and Credit Act of 2010, while urging Congress to
take action on three other issues of importance to small
businesses before adjourning. The House approved the Senate-
passed bill on Sept. 23 and it is expected to be signed by
President Obama later this month.
"If Congress is really serious about helping America's small
businesses spur economic growth and job creation, it must take
action to provide certainty to the tax system, and reduce the
burden brought on by high taxes and unnecessary government
paperwork," said Kathleen Schmatz, AAIA president and CEO, in
the letter.
"AAIA's members are working hard to recover from the recession
that economically harmed their businesses. Raising taxes and
increasing their paperwork burdens at this time will create
uncertainty and reduce the amount of capital that they can
invest in their business and to create jobs. Therefore, it is
critical that Congress take action as soon as possible to ensure
the future health and vitality of the automotive aftermarket, as
well as other small businesses in this country," said
Schmatz.
AAIA strongly urges that Congress take the following critical
three actions before it adjourns, to ensure the economic health
of our industry both now and in the future:
Extend Individual Tax Rates: While the taxes set
to expire are aimed at individuals, it is important to remember
that a large number of aftermarket small businesses are
organized as sole proprietors, partnerships or S corporations,
meaning that the taxes they pay on their business income are
based on individual tax rates. An increase in individual rates
will mean that business owners will have less money for
investment and job creation.
Permanently Repeal the Estate Tax: Under current
law, AAIA small business members face a reduction in the estate
tax exemption to $1 million and increase in rate to 55 percent
on Jan.1, 2011 unless Congress takes action. An aftermarket
business hit with the estate tax often must sell portions of the
business because they lack the liquid assets to meet the tax
payments. A report by the Joint Economic Committee noted that
the typical small business owner has 60 percent of the family
net worth invested in the business. Repealing this tax will
ensure that these businesses can survive the passing of a family
member and can continue to contribute to job growth in their
communities.
Repeal 1099 Reporting Requirements from Patient
Protection and Affordable Care Act (PPACA): Businesses are
already overburdened with tax paperwork and reporting
requirements. The new expanded information reporting requirement
included in PPACA will further increase the cost and complexity
of complying with the tax code. Specifically, beginning in 2012,
the new health care law requires businesses to send Form 1099s
for every business-to-business transaction of $600 or more for
both property and services - creating a tremendous new paperwork
compliance burden for small businesses.
