Ohio is home to more than 945,000 small businesses which employ almost half of the state’s workforce. Not only do these small businesses contribute to local economies, they invest in the communities. Whether employing workers, sponsoring high school sports teams or supporting non-profits, there is no question that small businesses make a tangible difference in Ohio’s towns and cities.
Despite the number of benefits that small businesses bring to communities across Ohio, they face obstacles in staying in business. Thankfully, some of those challenges have been mitigated as the Tax Cuts and Jobs Act, which President Trump signed in December, has provided entrepreneurs across America with the opportunity focus on their businesses, rather than on a burdensome tax code.
Most small businesses will now be able to deduct 20 percent off their business income in addition to having their taxable income taxed at lower rates. And for the first five years, they’ll be able to write off investments in new equipment the year the investment is made.
As the U.S. Small Business Administration’s Great Lakes regional administrator, I have seen the difference that the Tax Cuts and Jobs Act has made for Ohio entrepreneurs firsthand.
Thanks to the recent federal tax cut, local business owners are making investments in their businesses and employees by raising wages, increasing benefits and purchasing equipment to grow their businesses and create new jobs.
The owner of a manufacturing busines s in Columbus is expanding operations by investing in new equipment and adding eight to 10 additional jobs for disadvantaged workers in the area.
In Cincinnati, a healthcare business owner was able to purchase a building that he had been leasing for 17 years, a decision influenced by the tax cut. The owner also plans to give his employees bonuses and raise wages for field staff.
The benefits of the Tax Cuts and Jobs Act are far reaching, extending to Ohio’s small urban cities as well, with the creation of Opportunity Zones, which allow long-term private sector investments in low-income communities nationwide.
In Ohio, 320 Opportunity Zones have been certified, potential sites to increase employment and stimulate local economies.
By creating a favorable environment for small businesses to thrive, we are improving entrepreneurs’ chances for success and strengthening Ohio’s economic outlook. Small business owners are more optimistic about their companies’ success, leading to more jobs, higher wages and increased sales and profits.
We are already seeing the success of the Tax Cuts and Jobs Act, with workers’ pay improving nationwide. As a result of the act, the typical Ohio couple with two children is receiving nearly $2,300 more in their paycheck every year.
Consumers will be able to spend their hard-earned money where they want, great news for small businesses offering unique products and services.
Another impact of the Tax Cuts and Jobs Act is that Ohio small businesses are optimistic about the future and eager to hire new employees. According to the National Federation of Independent
Business’s job report, the number of small business owners hiring or trying to hire is at 63 percent, the highest level in 19 years.
These stories and statistics offer a clear picture of the impact that the Tax Cuts and Jobs Act has had on small businesses. By cutting taxes and regulations, the act has helped small businesses, the backbone of America’s economy, to thrive and grow.
The SBA empowers and advocates for small businesses and entrepreneurs throughout Ohio and the United States. We are dedicated to working for their continued success, as go-to resource at every stage of the businesses lifecycle for aspiring or current entrepreneurs.
I encourage you to reach out to our field offices or visit SBA.gov to learn more about what we can do for you. Follow us on Twitter at @SBAGreatLakes for frequent updates throughout the region or sign up for our e-newsletter at sba.gov/updates.
Rob Scott is a SBA Great Lakes Regional Administrator.