Small business tax relief - KFDA - NewsChannel 10 / Amarillo News, Weather, Sports

Small business tax relief

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Amarillo, TX - Small businesses in our area can expect to save money in 2014.

The changes give businesses the opportunity to deduct $1-million from their gross receipts for franchise tax.

Companies with less than a million in gross receipts are still exempt.

A finance expert, David Terry, says this will be a bonus for small businesses.

"There is now a permanent million dollar deduction that whether you are a retail business, a service business, you get that million dollar deduction from your first million dollars of revenue. Which I think is a bonus for small businesses"

Tax experts have said prior to the changes, some companies would purposely slow down business at the end of the year in order to stay under one-million dollars in gross receipts.

"Those who are close to that one million dollar mark it help those go ahead and try to sell as much as they can and make as much profit as they can in that year and not worry about ... Oh if I make over a dollar, I'm going to hit that mark because now they are able to take additional expenses."

This tax deduction will mean a lot to this area because so much of Amarillo's economy is made up of small businesses.

"Anytime state or federal governments do things to help small businesses lower their tax liability, that is a real bonus for small businesses. And our area particularly because we are so rich in small businesses and there is a lot of history and a lot of businesses that affect our economy that are small businesses in the Amarillo region. I think this is a big deal for us."

An estimated 1 in 4 companies in Texas that owed the tax in 2012 will see a tax saving in 2014.