New York – March 30, 2016 – A survey* undertaken by Friedman LLP Accountants and Advisors reveals senior business leaders’ concerns continue to heighten over proposed tax changes. The research confirms that while senior business leaders would like to take advantage of state, local and international tax savings, there is a gap in understanding how to align tax planning with business strategy.
As a result of the research, Friedman LLP is releasing a white paper today titled, 2016 Election Grows Near: Business Leaders React to Proposed Tax Changes, which highlights 6 critical insights that include:
Business taxation is of less concern than individual taxation – but should it be?
- When it comes to concerns over individual versus business taxes, four times as many respondents (almost 60%) were concerned about the elimination of the individual home mortgage interest deduction while only about 16% 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
- Almost half of respondents (47%) say state and local tax nexus concerns would not influence plans to expand their business into new states, with an additional 10% responding ‘I don’t know,’ indicating they may be unfamiliar with the critical tax nexus topic altogether.
Beneficial state and local tax incentives could encourage businesses to move
- More than half of respondents (57%) indicated state and local tax incentives would influence their choice either very much or at least somewhat. 16% of respondents said incentives would impact their decisions very little and 27% 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%) 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% of respondents indicated that they would move intangible property offshore if they could achieve an effective tax rate as low as 10%
Tax concerns are keeping businesses and individuals up at night leading into 2016 and beyond
- Open-ended responses indicated that the need for action and clarity are top of mind for senior business leaders.
Kimberly Dula, partner and CPA , Friedman LLP tax practice, said, “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. This research allows us to understand where the concerns exist and in turn more precisely guide us in empowering our clients.”
Michael Greenwald, partner and CPA, Friedman LLP corporate and business tax practice, agreed, “Elections present an opportunity to change existing paradigms, which can lead to beneficial and not so beneficial outcomes, depending on the individual or business. When it comes to corporate and business tax, while it’s clear from our study some business leaders will err on the side of caution, our research supports they may be open to making changes based on tax incentives at home and abroad,” Michael said. “It’s important that both businesses and individuals are aware of the savings that exist, so they can make more informed financial decisions.
Friedman LLP will be hosting a webinar on May 19 at 11 AM ET where Michael Greenwald and Kimberly Dula will discuss the research findings and answer questions during a Q&A session.
To download a copy of the white paper and for more information, visit us at http://www.friedmanllp.com/2016Election.*Friedman LLP conducted the survey in the fall of 2015 among companies across the United States with a predominant focus on the New York City metro area, New Jersey, and Pennsylvania. The survey compiles responses from 116 senior leaders of companies across industries including financial services, consumer goods, computer science and engineering, education, food services, health and pharmaceuticals, IT, legal services, marketing and advertising, nonprofit, and real estate, among others. The respondents include business owners, company presidents, chief executive officers, partners, directors, chief financial officers, controllers, and managing directors.