Berg: Tax legislation would decrease burden on small businesses

Rick Berg

FARGO – North Dakota Republican Rep. Rick Berg says bipartisan legislation he introduced in Congress would reduce the tax burden on small businesses.

Berg recently proposed the Small Business Tax Simplification Act, which eliminates a “barrier requirement” by allowing businesses with up to $10 million in gross receipts to choose which form of accounting they use.

“This is going to help America grow by simplifying the tax accounting system that small businesses use,” Berg said Monday. “Small business is what’s going to bring America back and make our country strong again.”

Current law limits accounting options to businesses with up to $5 million in gross receipts.

Any business that exceeds that has to use the accrual accounting method, which is far more complicated than the cash method, said Mark Giddings, a certified accountant who’s worked in Fargo for three decades.

“We’ve had businesses that have had to go through the accounting change process, which as they grow they have to adopt the more complicated accounting rules,” Giddings said. “They would’ve avoided that problem if this had been in place.”

Berg said the legislation aims to keep small businesses focused on growth and job creation.

“We don’t want them to have to stop and retool and change their accounting system,” Berg said. “We want to have them keep growing.”

Giddings said Berg’s legislation would most directly affect manufacturers, wholesale businesses and retail businesses.

Berg said the bill should be revenue-neutral, which means it shouldn’t cost taxpayers any money.

As of today, the “Small Business Tax Simplification Act” had six co-sponsors: four Republicans and two Democrats.

It’s been referred to the House Ways & Means Committee, of which Berg is a member.

Berg said the bill also has White House support.

“Although I don’t agree with President Obama on very many things, this is an area that is, at least, a step in the right direction,” Berg said.

Berg is in his first term in the U.S. House. He’s the Republican-endorsed candidate in North Dakota’s U.S. Senate race this year.