Mention of the margin tax brings frowns to CPAs' faces. “It’s too complicated,” they bemoan.
TSCPA recommendations for simplification and consistency have been politely received by legislators but not enough of them have been interested in rocking the boat.
Small business taxpayers complain about the complexity, the inconsistency between taxpayers and the horror of paying the tax even when losing money. Big business, while not enamored with the tax, seem to be more content to leave it alone for fear of what might replace it.
Now that the tax has been declared constitutional and it is clear a business income tax would also be constitutional, some hope we could return to the “earned surplus” franchise tax model. This legislative session there is talk of reducing the tax and even repealing it; several bills have been filed to eliminate or phase out the franchise tax.
While meeting with a freshman legislator this week to talk about TSCPA’s recommendations for improving the tax, the legislator was more interested in repeal than in making changes. He wanted to know: “Would the TSCPA support franchise tax repeal?”
Would we? Would you? It’s a question that we have never discussed, and I’d like to get some feedback. Please enter your responses as a comment on the blog. Would you support repeal and perhaps a sentence or two about why or why not.