Senior business leaders are concerned about some of the proposed tax changes they have heard from presidential candidates and other sources, according to a new survey by Friedman LLP.
The accounting and advisory firm released a white paper, 2016 Election Grows Near: Business Leaders React to Proposed Tax Changes, highlighting six key findings:
Business taxation is of less concern than individual taxation, but should it be?
Sixty percent of the respondents were concerned about the elimination of the individual home mortgage interest deduction while only about 16 percent cared that the partnership and S corporation tax systems could be merged, eliminating most of the best features of each.
Businesses are split on whether state and local tax nexus concerns will influence future expansion plans. Nearly half of the survey respondents (47 percent) said state and local tax nexus concerns would not influence their plans to expand their business into new states.
Beneficial state and local tax incentives could encourage businesses to move.
More than half of respondents (57 percent) indicated state and local tax incentives would influence their choice of whether or not to move, either very much or at least somewhat. Sixteen percent of respondents said incentives would impact their decisions very little and 27 percent of respondents said incentives would not play a role at all.
International tax landscape causes widespread concern.
For those respondents with international transactions, over half (54 percent) found the international tax environment to be either very overwhelming or somewhat overwhelming.
When it comes to intangible property, many businesses may be missing international tax opportunities to reduce their overall tax burden.
For international transactions and intangible property, 30 percent of respondents indicated that they would move intangible property offshore if they could achieve an effective tax rate as low as 10 percent.
“When given the opportunity to share their biggest concerns, the theme among respondents was taxpayers, whether for business purposes or individual purposes, just want action and clarity,” said Kimberly Dula, a partner in Friedman LLP’s tax practice. “This research allows us to understand where the concerns exist and in turn more precisely guide us in empowering our clients.”
The firm surveyed 116 senior business leaders last fall from companies in the New York City metropolitan area, New Jersey and Pennsylvania.
Friedman LLP will be hosting a webinar on May 19 at 11:00 AM ET on the findings. To download a copy of the white paper and for more information, visit http://www.friedmanllp.com/2016Election.
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