Solution Providers Plan Huge Hiring Spree In Wake Of Historic GOP Tax Cut


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For years, solution providers have complained about the country's antiquated tax system, arguing that it hampered their ability to reinvest in their businesses and add jobs.

Christmas came early for those solution providers on Wednesday, when Congress passed a long-awaited Republican bill that cuts the corporate tax from 35 percent to 21 percent. The Tax Cuts and Jobs Act represents the largest one-time reduction in U.S. history and slashes an estimated $1.46 trillion in overall tax collections by the government.

"This is a day that many, many businesses have been waiting for. I honestly thought I would never see this tax cut because the country is so divided with class warfare," said Terry Speigner, president and CEO of NGEN, a Lanham, Md., solution provider. "The country needs to look at this as an opportunity to look at both businesses and citizens as one."

[Related: Trump Economic Adviser Larry Kudlow: Now Is The Time To Pass Tax Reform]

Speigner is ready to hire an additional five to 10 people at his 30-person firm with the goal of doubling the size of his business to $16 million as a result of the tax cut. He also expects his business, an LLC with an S Corp selection, to see taxes fall from $400,000 to just under $200,000.

"That's $200,000 I am going to reinvest in my business," he said.

The GOP bill also creates a 20 percent business income tax reduction for smaller "pass-through" companies run as sole proprietorships, partnerships, LLCs and S-corporations – designations that apply to a majority of IT solution providers – until 2025. The provisions allow these businesses, which could be taxed at individual rates as high as 39.6 percent, to immediately write off new equipment costs and eliminate the corporate alternative minimum tax.

The House first passed the tax bill on Tuesday afternoon with a 227-203 vote. On Tuesday evening, the bill passed the Senate with a 51-48 vote. No Democrats voted for the bill and 12 House Republicans voted against it. On Wednesday, the House needed to re-vote due to some slight changes in the Senate version of the legislation. The President is expected to sign the bill into law before Christmas.

Many solution provider executives see the dramatic tax reduction as a game-changer that will allow them to direct savings toward staff expansion, growth initiatives and technology development.

Frank Vitagliano, CEO of Houston-based Computex Technology Solutions, No. 121 on the 2017 CRN Solution Provider 500, plans to use the tax savings to increase his company's headcount by about 20 percent next year, with a focus on hard-to-find security talent, managed services sales reps and solution architects focused on security and data center.

"This is a tremendous opportunity for the channel," said Vitagliano. "We can't wait to take advantage of it. We are in growth mode and moving quickly to add people in anticipation of this. This bill is going to have a very positive effect on companies like us that are in growth mode. We are very excited about it."

Computex has relied on a continuous recruitment offensive as a means of landing high-demand sales and technical talent. The company recently hired Michele Neuvar as vice president of human resources to lead the hiring charge.

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