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Fair and Equitable Tax Treatment

NAWBO's Position
NAWBO supports fair and equitable tax policy for large and small businesses that fosters the economic growth of women-owned and other small businesses. Legislation should be enacted to ensure tax equity and basic fairness for all forms of small business organizations. The privilege of deducting legitimate business expenses should no longer be based upon the entity chosen to operate the business.

Relevant Facts

• Business meals and entertainment: Small businesses typically rely on close personal relationships and customer service to compete for sales rather than expensive advertising campaigns that are 100 percent deductible. Thus, small business  expenditures for meals and entertainment are an important part of the marketing effort. Currently only 50 percent of such expenditures are deductible. NAWBO supports legislation that provides small business with relief in this area. An immediate small business tax deduction for 100 percent of the meals and entertainment expenses (with an annual cap of $10,000) is optimal.
• Fringe benefits: NAWBO supports the position that, if the payments of all fringe benefits are deductions to the C Corporation and exclusions from the taxable compensation of the C Corp owner-employee, then all such benefits should be excluded from the income of the non-C Corp owner as well. 
• Home office deductions: The current home office deduction is difficult to qualify for in terms of space use of the home and activities conducted there. Also, the calculation of the amount of the deduction is time consuming and complex. NAWBO supports the greater of a standard home office deduction, allowing home-based small
  business owners to deduct the costs of office, storage, studio, and retail space in their homes, regardless of whether customers physically visit or revenue is produced there.
• Estate (death) tax: The “death” tax creates a disincentive to expand a business, create jobs, and invest in capital equipment. Further, the estate tax is a form of double taxation since profits and earnings have already been taxed once when income taxes were paid. NAWBO supports estate tax reform provisions as it relates to family-owned and small businesses and encourages Congress to address the sunset provisions of The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) to remove the uncertainty of estate planning.