Member News ~ August 19, 2024
46th Annual Fall Arts & Craft Festival happening as part of Danville Heritage Festival
Held the first Saturday after Labor Day in September, 46th Annual Fall Arts & Crafts Festival is a celebration of the foods, shopping, and sounds that make it a special place. More than 125 vendors, activities for the kids, and bands rocking the Canal Park stage. Learn more.
Bloomsburg Fair Entries are Now Open
Are you crafty? Good at baking? Can grow a garden? Have a farm animal? Love photography? Well if you answered yes to any of those questions you may want to enter an exhibit into the fair! Learn how to enter here.
Bloomsburg Chevrolet hosting Car Show
The 17th Annual Car Show will be happening September 7th 9:00 am - 3:00 pm. Call 570-784-2720 or check out their Facebook page for more info.
Fulton Bank Invests $3,000 to Support Regional Growth in Central PA
Fulton Bank invested $3,000 in Focus Central Pennsylvania for 2024 to support smart regional economic growth by marketing the region to attract quality investment projects that cultivate economic growth. See full details here.
Commonwealth University – Bloomsburg Community Day Fair & Carnival August 23rd
The BU Community Day Fair and Carnival provides an opportunity for new incoming students at Commonwealth University - Bloomsburg to meet and begin to build relationships with the leaders and organizations that are part of the local community. Learn how to register your organization to attend.
Danville Child Development hosting Enrollment/Open House on August 22nd
Thursday August 22nd Danville Child Development will be hosting an Enrollment/Open House event from 5:30 - 7:30. There will be tours, facility tours, special guests from the Bloomsburg Children’s Museum, supporters from Service 1st, and opportunities for visitors to win prizes. Learn more.
Investing for Success as a Nonprofit Organization webinar happening September 12th
McKonly & Asbury will be hosing a free Investing for Success as a Nonprofit Organization on September 12th. Gain insights on specific ways to improve board of directors’ oversight of organization investment programs, effective strategies to structure investment accounts for long-term success and ideas on asset allocation practices for nonprofit organizations. Register here.
Commonwealth University offering Fall Workforce Development Courses
Check out the Fall training schedule of workforce development courses include Management and Leadership, Healthcare and more. Get more details about all their programs!
Bloomsburg Children's Museum Featured on WVIA
Listen to WVIA's story on the Bloomsburg Children's Museum's 40th Anniversary!
PA Careerlink Awareness Day Happening in September
Save the date for PA CareerLink® Awareness Day, 2024! All six PA CareerLink® sites in the Central Region will be holding events on Thursday, September 12th from 11am - 2pm. More details!
Brookdale hosting Hydrated Happy Hour
There’s no better way to beat the heat than by socializing over seasonal summer drinks, especially if they’re hydrating! Join Brookdale Senior Living and fellow professionals for light bites and a variety of unique, -refreshing beverages made by their culinary team. Call 570-249-6533 to RSVP!
T-Ross Brothers hosting Scavenger Hunt
Back by popular demand! Starting November 1st The Susquehanna Valley Scavenger Hunt, presented by T-Ross Brothers Construction, is in the works! Participants will navigate a gauntlet of puzzles, decode cryptic clues, and complete fun challenges throughout our community! If your business or organization would like to be apart of this event contact robertt@trossbrothers.com.
Columbia County Traveling Library hosting Verses in the Vineyard
Join CCTL for an evening of wine tastings, small bites, and literary delights. Visit www.travelinglibrary.org/verses to purchase tickets online. The event will be held Saturday, September 14, 6-8 PM at Freas Farm Winery - 30 Twin Church Rd Berwick, PA. Learn more!
IMC Partnering to Offer Electrical Safety Training
The Innovative Manufacturers’ Center (IMC), Inc. is excited to announce its continued partnership with The Manufacturers' Association to support training in electrical safety in central and southcentral Pennsylvania through December 2024. Open enrollment opportunities scheduled are August 21 – Williamsport, September 9 – Lewisburg, and October 8 – State College. Learn more.
The Women's Center of Columbia and Montour Counties Hosting 50th Anniversary Celebration
The Women’s Center, Inc. is thrilled to invite you to their 50th Anniversary Celebration happening November 16th at the Barn at Frosty Valley. Learn more about the celebration here.
Commonwealth University Hosting Fall Management, Supply Chain, Marketing, Technology & Analytics Career Expo
Commonwealth University of Pennsylvania is pleased to announce its Fall 2024 Management, Supply Chain, Marketing, Technology & Analytics Career Expo at the Bloomsburg campus. Meet students and potential hires from Bloomsburg, Lock Haven, and Mansfield who are interested in careers in Logistics, Information Technology, and Management. For more information reach out to Darwin Kysor at dkysor@commonwealthu.edu or call 570-484-2181.
Pennsylvania College of Technology offers Workforce Development Courses
Check out PCT's full listing of Workforce Development Courses happening all year long! Courses include Excel Training and Fundamentals of GD & T.
Camp Victory hosting Dr. O's Victory Ride August 25th
Camp Victory in Millville, PA is hosting Dr. O’s Ride for Victory on August 25th. The event will feature a scenic ride through the mountains surrounding Camp Victory. Learn more.
Servpro of Columbia, Montour & Sullivan Counties offering CE classes
5 CE classes will be offered by Servpro of Columbia, Montour & Sullivan Counties. Get the full schedule.
3rd Annual Photo contest hosted by Journey Bank
Community Giving Foundation partnering on a regional nonprofit Conference in October
Community Giving Foundation and First Community Foundation Partnership of Pennsylvania (FCFP) are thrilled to partner together to create Elevate2, a new regional nonprofit conference. The inaugural conference will be held on October 14-15, 2024, at Bucknell University in Lewisburg. More information is available online at elevate2.org
Resources for you to prepare for the upcoming storm from PPL and Columbia County Emergency Management.
FAR 31 Allowability: Marketing Expenses Versus Bid & Proposal Costs
Source: McKonly & Asbury
When it comes to A&E Firms undergoing a FAR Overhead Rate Audit, understanding allowable costs is essential. Among the various cost categories, marketing expenses and Bid & Proposal (B&P) costs play critical roles. However, distinguishing between the two can be challenging. Understanding the differences between marketing expenses and B&P costs under FAR 31 can help a firm optimize their overhead rate.
Marketing Expenses
What Are Marketing Expenses?
Marketing expenses encompass a wide range of activities aimed at promoting products, services, or the organization itself. These costs include advertising, public relations, trade shows, and promotional campaigns.
Key Points About Marketing Expenses:
1. Allocability: State DOTs may challenge selling and marketing costs if they are deemed unnecessary or not related to government contracts. To determine if these costs are reasonable, state DOTs consider several factors: the nature and amount of the expenses compared to what a prudent businessperson would spend, the proportion of costs allocated between government and commercial business, how current costs compare to historical costs, industry benchmarks for selling costs, and the extent of selling and marketing efforts relative to the contract value.
2. General Advertising: Costs of promotional materials, brochures, handouts, magazines, or other media designed to call favorable attention to the Company and its activities are unallowable.
3. Direct Sales Type Marketing: Including B&P costs, direct sales type marketing is generally allowable under FAR 31.205-18 and FAR 31.205-38.
Bid & Proposal Costs (B&P)
What Are B&P Costs?
B&P costs refer to the costs incurred in preparing, submitting, and supporting bids and proposals (whether or not solicited) for potential government or non-government contracts. These costs are essential for winning contracts and securing business opportunities.
Key Points About B&P Costs:
1. Allowability: Since 1997, all B&P costs are allowable if they are reasonable and allocable to a contract. This is a significant shift from earlier rules that restricted reimbursement for B&P and independent research and development costs.
2. Not Sponsored by a Grant: B&P efforts must not be sponsored by a grant.
3. Not Required in Contract Performance: The costs should not be required for contract performance.
4. Accurate Time Keeping: Senior managers and executives must accurately track and record their time associated with B&P activities.
5. Clear Guidelines: Process and procedures regarding specific activities that comprise B&P activities should be established and communicated to all staff members.
Examples of B&P Costs:
1. Proposal Development Labor: The salaries and wages of employees directly involved in creating proposals fall under B&P costs. This includes proposal writers, graphic designers, and subject matter experts.
2. Proposal Materials: Costs related to printing, binding, and distributing proposal documents are considered B&P costs. These include paper, ink, and other supplies.
3. Travel Expenses: If employees travel to meet with potential clients or attend pre-proposal conferences, their travel costs (airfare, lodging, meals) are part of B&P expenses.
Timekeeping and Allocation
Why Separate Timekeeping Matters?
If there’s marketing employees who also work on bids and proposals, it’s crucial to have a system that can track their time separately. Here’s why:
1. Allocation: By tracking time separately, one can allocate the time spent on bid and proposals as allowable indirect labor. This ensures that these costs are recoverable.
2. Unallowable Expenses: Simultaneously, one can identify the portion of time spent on general marketing as an unallowable expense. Unallowable costs should be excluded from any billing or proposal applicable to a government contract.
Conclusion
Understanding the nuances of B&P costs versus marketing expenses is vital for FAR compliance. Implementing proper timekeeping practices and maintaining accurate records will help organizations navigate these cost categories effectively. Remember to consult the specific FAR provisions and seek professional advice to ensure compliance with regulations.
By adhering to the rules and making informed decisions, companies can optimize their overhead rate while staying within the bounds of FAR 31 regulations.
McKonly & Asbury’s Architecture, Engineering, and Construction (AEC) team is ready to serve your overhead rate audit needs. Our experienced AEC team is prepared to guide you through the audit process, so don’t hesitate to contact us for any additional information or questions.
The post FAR 31 Allowability: Marketing Expenses Versus Bid & Proposal Costs appeared first on McKonly & Asbury.
Protecting Businesses from Cyber Threats
Source: U.S. Chamber of Commerce
Businesses in communities nationwide face growing and ever-evolving cyber threats that risk disrupting our everyday lives, with severe consequences for our economy.
The U.S. Chamber of Commerce recently hosted the Threat Intelligence Forum, where experts from industry and government discussed how the public and private sectors can work together to protect businesses and consumers.
What they said:
- Emphasizing the need for better information sharing, Laura Galante, Director of the Cyber Threat Intelligence Integration Center, remarked, “Understanding who’s behind these attacks and what’s happening is crucial. Private sector intelligence is key to responding effectively.”
- Jeff Greene from the Cyber and Infrastructure Security Agency urged businesses to collaborate with government agencies, stating, “Work with us to improve security. Tell us where we’re falling short, and help us get better.”
Why it matters: Cyberattacks—whether from lone actors or rogue nation-states—are becoming more frequent and sophisticated. They target everything from personal data to a country’s critical infrastructure. These attacks can cause severe disruptions, affecting our daily lives and businesses of all sizes.
AI and cybersecurity: The forum also revealed insights into how artificial intelligence (AI) is reshaping the cybersecurity landscape as a tool for attackers and defenders alike.
- Cyber threats and AI: Cyber attackers increasingly use AI to create fake videos (deep fakes), manipulate large language models (LLMs), and spread false information. Conversely, AI equips U.S. intelligence agencies to detect and counter these attacks, strengthening our overall cybersecurity.
- Potential risks to infrastructure: AI is crucial for resilience against cyber threats. However, misuse can endanger critical infrastructure, such as power grids and energy pipelines. Collaboration, transparent information sharing, and strategic alignment are vital for ensuring the safety and reliability of essential services.
- Insights from the FBI: As the nation's top law enforcement agency, the FBI plays a pivotal role in leveraging insights from private companies to identify and combat emerging cyber threats more effectively. This collaboration is crucial for safeguarding vital industries like healthcare and finance, which are prime targets due to their sensitive data. The FBI's proactive approach should instill a sense of security in the audience.
State Fiscal Office Warns of General Fund Surplus Depletion
Source: PA Chamber of Business and Industry
Pennsylvania’s nonpartisan Independent Fiscal Office recently issued a research brief that updates its revenue projections against expenditures based on the FY 2024-25 enacted budget. And, according to the IFO, spending is now outpacing revenue and the revenue estimate for the current fiscal year is $320 million lower than the official estimate certified by Gov. Josh Shapiro. This has the office warning that, unless steps are taken to lower spending or boost revenue, the result could be a budget deficit of close to $1.6 billion by next year.
The IFO projects that if education spending increases by 2.4 percent, human services spending increases by 5.2 percent, and personnel-related spending increases by 4.2 percent, the state budget will be close to $50 billion in 2025-26 even though the state is projected to only bring in about $45 billion in revenue.
“For FY 25-26, revenue growth is modest (1.4 percent) due to the ongoing corporate rate cut, the reduction in interest that accrues on General Fund balances (-$240 million) and the deduction of newly enacted tax law changes (-$304 million),” the IFO said in its analysis.
The IFO notes in its analysis that the Shapiro administration has projected that Pennsylvania will get $300 million more in revenue in this fiscal year than the IFO has projected, meaning the deficit would be slightly less (if the administration’s estimates hold true.)
The 2024-25 budget will require about $3 billion of surplus cash to balance, leaving about $10.5 billion in reserve.
The IFO’s analysis warns that the cost of tapping into its reserves to pay for this year’s budget will leave the state with just under $3 billion in general fund surplus at the end of 2024-25. That surplus is on pace to become a $1.57 billion deficit by the end of 2025-26.
The state ended 2023-24 with a $6.6 billion surplus, plus almost $7 billion in the Rainy Day Fund.
To read the full report, click here.
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Founded in 1916, the Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of BusinessTM.
State Budget Included Several Pro Business Victories
Source: PA Chamber of Business and Industry
Pennsylvania’s recently enacted state budget includes several pro-business victories including eliminating Pennsylvania’s Startup Tax by raising the cap on net operating losses, modernizing our permitting processes, and advancing workforce initiatives. These provisions will help attract new economic opportunities, expedite project approvals so that businesses can grow and create jobs, help employers address workforce challenges, and equip Pennsylvanians with the skills needed for the future. See the highlights below!
Tax Reform
- The 2024-25 PA budget eliminates the startup tax by improving the
treatment of net operating losses (NOLs). This change makes PA more attractive for new and growing businesses. - NOL reforms now aligns with federal tax standards on carrying business losses forward.
Permitting Reform
- PA’s new state budget streamlines the permitting process, reducing costs and delays for businesses.
- Reforms include third-party reviews and set response timelines.
- PA's budget reforms our outdated permitting system, promoting transparency and efficiency.
Workforce Development
- Investments in career and technical education, making it easier for qualified individuals to become CTE educators.
- New scholarships for in-demand fields and greater funding for workforce housing.
- Boosts investment in career and technical education and
incentivizes employer reimbursements for childcare expenses.
New Member Highlight-Next Gen Marketing Group
Next Gen Marketing Group is the passion of company president Suzanne Campo! She enjoys collaborating with small businesses to enhance their brand through professional photography, short-form videos, and content creation tailored for social media marketing. Next Gen Marketing is thrilled to join the Columbia Montour Chamber and enthusiastic about helping the community by applying its skills to provide value wherever necessary. The business's goal is to use short-form video cards to showcase their unique and distinct value to help drive business growth. Learn more about Suzanne and Next Gen Marketing Group here.
The Importance of Emotional Intelligence in Leadership
- Emotional intelligence (EQ) is critical for effective leadership, involving skills such as self-awareness, self-regulation, motivation, empathy, and social skills.
- Leaders with high EQ can manage relationships and team dynamics better, fostering a culture of trust and teamwork.
- Improving self-awareness is the first step to enhancing EQ, essential for aligning one's self-perception with team feedback and expectations.
- High EQ leaders excel in communication, adapting their style to meet diverse team needs, resolving conflicts, and promoting an inclusive environment.
- Emotional intelligence benefits the entire workplace, leading to a supportive environment where employees feel valued, boosting engagement, productivity, and retention.
670 ~ 3 min. read
In today's fast-paced and ever-evolving workplace, the role of dynamic leadership is critical. A key quality that sets apart successful leaders is emotional intelligence (EQ). Leaders with high EQ can effectively manage relationships, team dynamics, and face challenges head-on. Read on to learn why emotional intelligence matters when it comes to leadership and how it contributes to a positive workplace.
What is Emotional Intelligence?
Emotional intelligence is about understanding and managing your own emotions and those of others. It involves five main skills: self-awareness, self-regulation, motivation, empathy, and social skills. Leaders who are strong in these areas can build better relationships with their teams, creating a culture of trust and teamwork.
Unfortunately, leaders who lack emotional intelligence often find managing others frustrating, and unsurprisingly, their team members find their management frustrating. Low EQ can look like variations of the following:
- Tension in conversations
- Blaming others when a project fails
- Emotional outbursts.
Improving EQ starts with the first skill, self-awareness. While many people believe they are self-aware, research shows that in reality only 10-15% of individuals in the workplace have this skill. To cultivate more self-awareness, make a practice of reviewing your performance and asking your team to do the same. Do the assessments match? Closing the gap between your self-perception and the experience of your team will help you build this essential muscle.
Managing Relationships
Leaders work with diverse teams. High EQ helps managers understand their team's feelings and adapt their communication style. This skill is crucial for building rapport, resolving conflicts, and fostering an inclusive environment where everyone feels valued.
To improve your communication style, assess your own strengths and weaknesses. What kind of feedback have you received over the years about how you communicate? Where can you improve?
Employees represent the spectrum of human personality — get to know each person on your team and their communication preferences. Some people may like affirmation and recognition, others may value facts and information. Some may want autonomy and independence. A high EQ lets you vary your communication and interactions to build trust and relationships, even when differences are present.
Handling Team Dynamics
Good team dynamics are essential for productivity and morale. Emotionally intelligent leaders can spot and resolve conflicts early, encourage open communication, and promote collaborative problem-solving, leading to better teamwork. But this only happens when a leader is aware of their own shortcomings.
For instance, if you feel defensive when your ideas are challenged, you might become rigid and uncollaborative. When you understand your own challenges, you can self-regulate rather than react. In order to be effective at conflict resolution, practice active listening, responding with empathy, and provide constructive feedback, according to Michele D’Amico, an executive leadership coach and founder of Vetta Consultants. Mastering these skills not only enhances personal growth but also significantly improves your ability to navigate and resolve conflicts effectively.
Building a Positive Workplace
Emotional intelligence benefits the whole workplace, not just individual leaders. It leads to a supportive environment where employees feel valued. Experts in leadership argue that Emotional Intelligence (EQ) is crucial for addressing workforce phenomena like the Great Resignation and quiet quitting. This is because EQ encourages leaders to adopt a management style marked by openness, curiosity, and flexibility—traits that are fundamental components of emotional intelligence. Leaders who use these skills at work help to boost engagement, productivity, and retention, with team members more likely to work well together and contribute to success.
The Takeaway
Emotional intelligence is crucial for leadership. As the workplace changes, there's a growing need for leaders who are not just skilled in their job but who also have self-awareness, the ability to manage their emotions, listen openly, lead with curiosity, and resolve conflicts. This kind of intelligence is essential for great leadership because it builds trust, teamwork, and respect. Leaders who work on improving their self-awareness, self-control, motivation, empathy, and social skills can handle the challenges of leadership better. Looking ahead, it's important for leaders to focus on developing their emotional intelligence to succeed in the ever-evolving work environment.
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The Columbia Montour Chamber of Commerce is a private non-profit organization that aims to support the growth and development of local businesses and our regional economy. We strive to create content that not only educates but also fosters a sense of connection and collaboration among our readers. Join us as we explore topics such as economic development, networking opportunities, upcoming events, and success stories from our vibrant community. Our resources provide insights, advice, and news that are relevant to business owners, entrepreneurs, and community members alike.
Member News ~ August 5, 2024
Press Enterprise Commercial Printing Celebrates new Printer with Ribbon cutting
On August 1st Press Enterprise Commercial Printing cut the ribbon a new Digital Press. This new printer will help with faster turn around times for printing customers. Congratulations!
Bloomsburg Children's Museum Announces August Programs and Camps
Check out all the programs and camps happening at the Bloomsburg Children's Museum in August.
Sugarloaf-Based HVAC Contractor, AC&R Services, Celebrates 45th Anniversary
AC & R's story began in 1979 when Dean Hilliard, current owner and company president, formed as a “service only” company. Congratulations to AC & R! Check out full press release here!
Commonwealth University – Bloomsburg Community Day Fair & Carnival August 23rd
The BU Community Day Fair and Carnival provides an opportunity for new incoming students at Commonwealth University - Bloomsburg to meet and begin to build relationships with the leaders and organizations that are part of the local community. Learn how to register your organization to attend.
The Best of the Best Announced by the Press Enterprise
On July 27th the Press Enterprise released the winners of their annual Best of the Best contest. Check out which Chamber members were finalists.
Mark your Calendars for Danville Third Thursday Events
Happening August 15th from 5:00 - 7:00 Danville will host Third Thursday events! Live music, sidewalk sales, food & drink features, and more!
Girton Manufacturing celebrate employee milestone
Congratulations to James Pensyl, Sales Manager for the Thermal Division and Leadership Central Penn Class of 2022 Graduate, for 25 years at Girton Manufacturing Co., Inc.!
For the Cause Hosting Annual Gala
For the Cause is hosting their Annual Gala on Friday August 9th. The evening will include live music, dinner, a silent auction and raffles. To learn more and RSVP to the event click here.
PA Careerlink Awareness Day Happening in September
Save the date for PA CareerLink® Awareness Day, 2024! All six PA CareerLink® sites in the Central Region will be holding events on Thursday, September 12th from 11am - 2pm. More details to follow as the day approaches!
BIDA co-Hosting Active Shooter Workshop
B.I.D.A. is co-hosting an Active Shooter Workshop with Texas A&M Engineering Extension Service (TEEX) is on Tuesday, August 13th in the large community room in the Eagles Building. To register, you MUST create a student profile using this link. This workshop is free and is expected to fill up fast. Learn more about the workshop.
T-Ross Brothers hosting Scavenger Hunt
Back by popular demand! Starting November 1st The Susquehanna Valley Scavenger Hunt, presented by T-Ross Brothers Construction, is in the works! Participants will navigate a gauntlet of puzzles, decode cryptic clues, and complete fun challenges throughout our community! If your business or organization would like to be apart of this event contact robertt@trossbrothers.com.
IMC Partnering to Offer Electrical Safety Training
The Innovative Manufacturers’ Center (IMC), Inc. is excited to announce its continued partnership with The Manufacturers' Association to support training in electrical safety in central and southcentral Pennsylvania through December 2024. Open enrollment opportunities scheduled are as August 7 – Altoona, August 21 – Williamsport, September 9 – Lewisburg, and October 8 – State College. Learn more.
Commonwealth University Hosting Fall Management, Supply Chain, Marketing, Technology & Analytics Career Expo
Commonwealth University of Pennsylvania is pleased to announce its Fall 2024 Management, Supply Chain, Marketing, Technology & Analytics Career Expo at the Bloomsburg campus. Meet students and potential hires from Bloomsburg, Lock Haven, and Mansfield who are interested in careers in Logistics, Information Technology, and Management. For more information reach out to Darwin Kysor at dkysor@commonwealthu.edu or call 570-484-2181.
Pennsylvania College of Technology offers Workforce Development Courses
Check out PCT's full listing of Workforce Development Courses happening all year long! Courses include Excel Training and Fundamentals of GD & T.
Camp Victory hosting Dr. O's Victory Ride August 25th
Camp Victory in Millville, PA is hosting Dr. O’s Ride for Victory on August 25th. The event will feature a scenic ride through the mountains surrounding Camp Victory. Learn more.
Servpro of Columbia, Montour & Sullivan Counties offering CE classes
5 CE classes will be offered by Servpro of Columbia, Montour & Sullivan Counties. Get the full schedule.
LCBC hosting annual Global Leadership Summit
For over 30 years, the Global Leadership Summit has been empowering leaders worldwide. LCBC will be hosting this virtual summit at their Columbia - Montour Campus on August 8-9. Learn more.
Bloomsburg Rotary Hosting 30th Annual Jeffrey H. Lewis Memorial "Kids Klassic"
Wednesday, August 14th will see the 30th Annual Jeffrey H. Lewis Memorial "Kids Klassic" at Frosty Valley Resort. Learn more.
3rd Annual Photo contest hosted by Journey Bank
Community Giving Foundation partnering on a regional nonprofit Conference in October
Community Giving Foundation and First Community Foundation Partnership of Pennsylvania (FCFP) are thrilled to partner together to create Elevate2, a new regional nonprofit conference. The inaugural conference will be held on October 14-15, 2024, at Bucknell University in Lewisburg. More information is available online at elevate2.org
From Main Street: Pro-growth Tax Policy Is Vital for Small Business
Source: U.S. Chamber of Commerce
When Main Street businesses have a competitive tax code, local economies grow and prosper, and workers across the country benefit from higher paychecks and more job opportunities.
In December 2017, Congress passed the Tax Cuts and Jobs Act (TCJA), the most comprehensive tax reform legislation since 1986. The TCJA significantly reduced and simplified the federal income tax burden for American families and workers and modernized the taxation of business income. However, many of the TCJA's key reforms were temporary and are set to expire at the end of 2025.
Recent polling from the Chamber shows that a majority (80%) of voters expressed concern that increasing taxes on U.S. businesses will lead to higher prices. Ninety-three percent (93%) think American families and businesses are already paying enough in taxes.
The Chamber recently spoke with several small business owners on our Small Business Council about the impact of the 2017 tax reforms and what’s at stake if they’re allowed to expire at the end of 2025.
A competitive tax code means small businesses like Kaddas Enterprises, a plastic fabrication company in Salt Lake City, Utah, can invest in their operations and workforce.
“For us to make an investment in robotics, for example, as a small business, it's over a $1 million dollar investment. That is substantial and having a tax policy that helps us write that off quickly and use accelerated depreciation helps us reinvest back into our organization,” says CEO Natalie Kaddas.
Traci Tapani, co-president of sheet metal workshop Wyoming Machine Inc. in Stacy, Minnesota, says her small businesses needs a competitive tax code that provides certainty for planning business operations.
“I need to plan and know how much money I'm going to be paying the federal government so that I can make decisions about what I can invest in my business to continually improve it,” says Tapani. “As a small manufacturer, I just can't keep spending and spending to cover unplanned expenses. It makes business harder to do.”
Why should Congress extend the 2017 tax reforms?
Larry Kidd, president and CEO of :hire, a staffing agency in Columbus, Ohio, says taking away tax cuts hinders future growth.
“I'm not concerned about competition. I'm not as concerned about the economy; I'm concerned about government regulation and overtaxing. Because when they take that kind of tax cut away from us, it will substantially decrease our ability to grow,” says Kidd.
Some businesses, like Kaddas Enterprises, have already seen the effect of expiring tax cuts.
“Some of them [tax reforms] have already expired. Our tax liability has gone up by almost 30%, and that limits our ability to invest in additional jobs, make new products, and innovate in new areas of opportunity,” says Kaddas. “I am worried about 2025 and the additional tax cliffs that we're facing if something drastically different isn’t done quickly."
The 2017 tax reforms created opportunity for growth and investment in businesses across the country, and business owners are worried a roll back now would hamstring their ability to capitalize on important investments—including those made possible by other federal legislation to modernize America’s infrastructure and bolster domestic research and development and manufacturing supply chains.
“Think about the Infrastructure Act and the CHIPS Act, which are important legislation that can drive manufacturing forward in the United States,” says Tapani. “If we start piling more taxes on top of that, and extra expenses on whatever front, it's going to be hard for us to take advantage of these once-in-a-lifetime investments in manufacturing.”
What is the 20% deduction for pass-through businesses and why is it important?
In 2017, as part of the TCJA, Congress passed a permanent reduction to the corporate income tax rate from 35% to 21%. And to ensure that pass-through businesses like sole proprietorships, partnerships, and S corporations weren’t put at a tax disadvantage relative to C corporations, Congress created a new 20% deduction for qualified business income.
Unlike the lower corporate rate, the 20% deduction for pass-through businesses is temporary and scheduled to expire at the end of 2025. Small business owners like Kidd say those who feel the impact of this deduction the most are the smallest businesses because they have the least number of employees.
“With high inflation, high interest rates, high cost of labor, and difficulty in finding people, this is not the time to let this [20% pass-through deduction] expire. We have to get this pushed through. We have to extend it, and frankly, we need to make it permanent, " says Kidd.
Traci Tapani says the 20% pass-through deduction is important for businesses she works with in the manufacturing supply chain.
“We work as part of a supply chain that supplies larger manufacturers in Minnesota and some other states throughout the country. It's a mix of small businesses and large businesses working together to create a supply chain. So, I know that for many of my customers and suppliers that the 20% pass-through tax deduction really made a difference.”
To learn more about the Chamber’s advocacy in support of a pro-growth, globally competitive tax system, click here.
About the author:
Rachel Ledbetter is a senior manager for communications and strategy at the U.S. Chamber of Commerce.