IT Nonprofit Urges Businesses To Identify ‘Fiscal Cliff’ Tax Implications
December 26, 2012
Small and mid-sized businesses in the information technology sector would be wise to look over the potential tax law implications the “fiscal cliff” could have on them in the coming year, according to an industry nonprofit.
In a white paper, CompTIA, an organization made up of various members and companies in the IT field, noted tech businesses will likely face financial adjustments due to the economic issues Congress plans to address in its upcoming session.
Specifically, the nonprofit indicated in the white paper, titled “Impact of the Fiscal Cliff on SMB IT Companies,” that the removal of certain tax credit provisions may harm a number of IT businesses. Thus, CompTIA recommends these companies analyze how they can prepare.
“As Congress returns to wrap up unfinished business, I urge them to consider the impact of tax and federal policies on the domestic IT sector, which employs more than two million workers and contributes $110 billion to workers’ payrolls,” said CompTIA president and chief executive officer Todd Thibodeaux.
One tax credit in particular that the white paper mentions is the research and development tax credit, which incentivizes the development or betterment of new technologies.
Business expensing is another facet of fiscal cliff discussions that may ultimately affect the IT sector. As CompTIA states, Section 179 small business expensing will drop to $25,000 next year, a considerable decrease from $139,000 this year.
Members of the tech industry have requested that the White House carefully consider whether tax hikes and other regulatory changes for the IT and similar industries are needed.
Nine executives in the tech field, including Michael Dell of Dell and Paul Jacobs of Qualcomm, signed a letter to President Barack Obama recently asking that the government pass legislation to prevent spending cuts and tax hikes from taking place.