The Working Families Tax Cut (WFTC) passed by Congressional Republicans last year contained several important tax provisions that help small businesses reinvest in their business, their workforce, and their local communities.
Wholesaler-distributors collectively employ 6.1 million workers, ranging in size from small, closely held family businesses to Fortune 500 companies. The majority are small or medium sized businesses and 81% of companies in the industry have less than 20 employees. The industry pays one of the highest effective income tax rates of all industries, with many businesses paying an average effective rate of 30% in combined federal and state taxes.
The WFTC contained several policies helping these small businesses including:
- Permanent 20% 199A small business deduction, ensuring businesses organized as S-corporations and LLCs saw tax relief that would allow them to make long-term decisions and investments.
- 100% depreciation for new business investments, allowing businesses to immediately deduct the costs of new purchases including equipment, machinery, vehicles, and furniture.
- Permanent full expensing for research and development expenses, ensuring that wholesaler-distributors can continue innovating and investing in new technologies.
Testimonials from wholesale distribution businesses on how the WFTC help small businesses can be found below:
Derrick Murdock, CEO of IPS Packaging and Automation, a family-owned and operated second generation business based in Greenville, SC
“The Working Families Tax Cut has ensured we have certainty and peace of mind by passing permanent, pro-business tax cuts like the 199A small business deduction, 100% bonus depreciation and full expensing for research and development costs. This has meant we can invest in our business by hiring more workers, investing in new technologies, and buying more equipment. It allows us to offset the rising cost of doing business and allows us to make our customers more competitive and productive. The bill also ensures our 200 employees have more take-home pay through tax cuts like the expanded child tax credit and the no tax on overtime provision.”
Mike Medart, President and Chief Executive Officer of Medart Inc, a third-generation distributor located in St. Louis, Missouri
“As a third-generation wholesale distributor representing the outdoor power equipment, rental, industrial, and marine industries, Medart Inc. does well when the economy is strong. The One Big Beautiful Bill prevented a tax increase on millions of small businesses, including the majority of our customers and suppliers, which in turn will help facilitate more investment into their businesses and will ultimately help us and the economy.”
Glenn Beyerl, Chairman, KPM Exceptional, LLC, a wholesale distributor of commercial and consumer outdoor power equipment based in New Jersey
“KPM was founded in 1967 as a regional distributor of outdoor power equipment based in New Jersey. We are proud of the work environment we foster for our employees and the world-class service we provide for our dealers. Tax policies enacted in the Working Families Tax Cut, like the permanent 199A small business deduction and the permanent death tax exemption will ensure we remain competitive with larger companies and will help us continue to grow, hire, and offer competitive pricing.”
