Little Impact Likely for Most Businesses

Jim Gerding, a partner and director of tax at Ernst & Young in Irvine, said that most businesses will feel little impact from the legislation.

The lower capital gains tax might spur some sales of companies, he said. And if the capital gains tax cut encourages more investment in the surging stock market, that would benefit public companies.

Small businesses with revenue of $5 million or less will get a break through an exemption from the alternative minimum tax, he said. Previously, those companies have had to pay some taxes even if they were unprofitable.

However, some tax cuts for individuals are offset in the legislation by increases in taxes that could dampen demand for certain products and services, Gerding said. For instance, aviation excise taxes and taxes on tobacco are being raised.

Other changes in the tax code are narrowly targeted at certain types of business transactions, he said.

But, Gerding said, “if a company is just running its business and not going through structural changes, this will not affect them at all.”

*

Patrice Apodaca covers economic issues for The Times. She can be reached at (714) 966-5979 and at patrice.apodaca@latimes.com