Small businesses feel bottom line burdens of federal tax compliance

Federal tax compliance is costing small businesses 36 percent more than large businesses, according to new data from the Small Business Administration. Small businesses were measured as companies with 20 employees or fewer while large businesses were categorized as staffing more than 500 employees.

The total annual cost for tax compliance runs small businesses an average of $10,585 per employee, while large businesses pay an average of $7,755 per employee, the SBA study revealed.

Regulations have led to a 38 percent increase in cost per employee since 2005. Companies with 26 to 499 employees pay an average of $7,454 per worker, the Toledo Blade report

"That is an unfair burden to place on American small business," said Winslow Sargeant chief counsel for advocacy at the SBA.

Environmental regulations also have a disproportionate impact on compliance costs for smaller companies. Small business pay an average of $4,101 per employee compared to just $883 per employee in large companies - a difference of 364 percent.

The increased burden falls to the 89 percent of businesses in the United States, while large businesses make up just 0.3 percent of American companies, according to SBA data.

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