June 24, 2019
On June 24, 2019, a much anticipated proposed rule that changes the period of measurement for a receipts-based size calculation from three years to five years was published by the Small Business Administration.
The proposed rule summary reads:
The U.S. Small Business Administration (SBA or Agency) proposes to modify its method for calculating annual average receipts used to prescribe size standards for small businesses. Specifically, consistent with a recent amendment to the Small Business Act, SBA proposes to change its regulations on the calculation of annual average receipts for all receipts-based SBA size standards and other agencies’ proposed size standards for service-industry firms from a 3-year averaging period to a 5-year averaging period.
The Small Business Administration implemented the change “to promote consistency government-wide on small business size standards, SBA proposes to change its own size standards to provide for a 5-year averaging period for calculating annual average receipts for all receipts-based size standards.”