What is a small business?

A recent report by the Joint Committee on Taxation, a nonpartisan committee of the U.S. Congress, discusses the definitions of “small business” for tax purposes. As the report states, there’s no one definition of a small business. Instead, several definitions apply depending on the context, various criteria and certain thresholds. Criteria include a business’s gross assets, gross receipts and its number of shareholders and employees. Even if a criterion such as gross receipts is the same across definitions, the definitions may use different thresholds. Also, for some purposes, the tax code might define a small business in more than one way.