Small businesses to legislature: There is more work to be done
Published 6:14 pm Friday, April 1, 2022
By Julia Cozen Hammond
According to Virginia’s constitution, lawmakers have 60 days to finish business. However, earlier this month, the legislature gaveled out before passing a budget and failing to address key issues concerning one of the most vulnerable sectors in Virginia’s economy: small business.
Here’s what Virginia’s hard-working and job-creating entrepreneurs need once legislators finally get back to business: Make sure small-business owners have the resources they need to move Virginia’s economy forward during the recovery.
At the beginning of session, NFIB, or the National Federation of Independent Business, launched a statewide campaign highlighting the challenges facing Virginia small businesses. There have been successes: Virginia’s Worker Safety board removed unnecessary COVID-19 worker restrictions, and bipartisan legislation preventing small-business owners from a costly and time-consuming government mandated program, allowing employers to voluntarily purchase private insurance family leave plans. The third victory, HB 971, conforms Virginia’s tax code to the federal American Rescue Plan Act, allowing hard-hit business owners who took out Paycheck Protection Program loans to deduct their expenses.
However, there’s plenty left on the table.
As the most recent NFIB data shows, most small-business owners reported their local economy remains below pre-crisis levels of economic activity. Another 39% don’t expect conditions to fully improve until 2023 or later.
That’s why it’s so important for Virginia legislators to provide additional tax relief to help small businesses recover faster, keep and hire employees, and bolster their communities. Most Virginia small businesses file individually. This priority would increase the state deduction rate of $9,000 per couple to the federal rate of $25,000. Virginia is late to the game on this issue: most other states have already passed this common-sense legislation.
Small businesses are also concerned about Virginia’s increased fuel tax; most are heavily reliant upon gas to deliver goods and get to places to perform services. It’s another punch in the gut: According to the latest NFIB Small Business Optimism Index, 26% of small-business owners nationwide said inflation is the single most important problem in operating their business, the highest since 1981.
Earlier this session, the governor pushed to suspend that increased rate for one year. Lawmakers need to do the same.
Lastly, small business needs unemployment insurance reform. If lawmakers don’t act now, Virginia entrepreneurs could face another hit in the form of higher payroll taxes. It’s simple: Replenish the unemployment trust fund with unused federal relief money to shield small businesses from significant payroll tax increases.
There’s no question Virginia has the capacity to do it using some of the $4.3 billion in federal government money. Again, many other states have taken this sensible step to protect our mom-and-pop businesses from closing. Why hasn’t Virginia done the same?
Here’s the takeaway: Main Street businesses are suffering. While lawmakers have taken some steps to provide relief, there’s other simple, no-brainer bills to pass when they get back to Richmond next month that will not only save your favorite small business from going under, but bolster the entire state’s economy.
Julia Cozen Hammond is the state director for the National Federation of Independent Business, with more than 8,000 members across Virginia. Her email address is email@example.com