Tompkins Chamber Hosts Discussion on Impacts of Tax Reform
By Jennifer Tavares, CEcD
At its first meeting of 2018, the Tompkins County Chamber’s Government & Community Affairs Committee hosted a roundtable discussion about anticipated impacts of changes to Federal tax policy on small businesses and non-profit organizations, as well as the Governor’s 2019 Executive Budget proposal.
The committee hosted guests from Sciarabba Walker, including Denise Coyle and Barbara Policay, who are subject matter experts in areas of small business and human resources tax policy. Both Ms. Coyle and Ms. Policay cautioned that the tax code is still being written and there remains a high degree of uncertainty. The initial tax reform legislation was released with numerous technical errors – meaning that corrections are still needed to create a functional tax code – so it is important to stay abreast of additional changes that might impact your business.
Key changes noted that will impact small businesses were:
- 21% corporate tax rate
- 20% deduction on qualified business income
- changes to non-taxable employee benefits such as food, transportation, parking
- changes to the way employee achievement awards are recognized
- changes in the way traditional business expenses are treated, including meals/entertainment
- some pass-through entities may want to consider increasing wages
- new W4’s for the 2018 tax year have not been released yet
Committee member George Ferrari, CEO of the Community Foundation of Tompkins County, also shared insights regarding changes to the way charitable giving might be impacted by Federal tax policy. The non-profit sector anticipates a volatile and unpredictable period over the next few years largely due to substantial changes in tax rates and incentives for endowed fund gifts, estate taxes,
and the way larger gifts are treated. Changes to the standard deduction (which is doubling for most taxpayers) will mean that many taxpayers will no longer itemize their deductions, and therefore lose their Federal incentive to donate. However, Mr. Ferrari shared that non-profits aren’t expecting large changes in donor behavior or frequency of smaller donations due to this change—donors have other reasons they choose to give.
Jennifer Tavares, Chamber President, updated the group regarding Governor Cuomo’s 2019 Executive Budget, and some areas of concern regarding effective tax increases being utilized to balance an anticipated approximate $4 Billion budget shortfall for 2019. Areas of concern include allowing state tax policy to continue mirroring the Federal tax policy changes to deductions, specifically to the State and Local Tax (SALT) deduction, which will result in over $700 million in revenue increases for NYS if they “do nothing”. Other areas of concern include a windfall profit tax on health insurers, which could result in increased premiums if passed onto consumers.
More information to support you in researching your personal or business tax circumstances can be found here on Sciarabba Walker’s blog: http://swcllp.com/blog/
More information about the Governor’s Executive Budget proposal for 2019 can be found here: http://www.bcnys.org/inside/nysbudget.htm (I recommend the following link, which will take you to the Business Council’s summary of the key issues for businesses http://www.bcnys.org/inside/budget/2018/FY-2019-budget-summary.html
The Chamber’s Government & Community Affairs Committee generally meets on the first Monday of each month at noon in the Chamber conference room. In 2017, we explored several engaging topics and important community issues such as minimum/living wage policy, transportation infrastructure, the Cornell Tech campus, hate speech/crimes in places of business, single payer healthcare, and more. To join this committee list, contact Cassandra Jenis at email@example.com.