Domestic Partners, Same Sex Marriage

You all have probably seen that it appears Prop 8 is going to pass. Did you know however that regardless of the passage of Prop 8 that if you have a Domestic Partner of one of your employees and they are paying their health insurance premiums through your group plan that the Federal government does not allow a deduction of the premiums from the Domestic partners income tax. In fact they will impute a cost on this. This is also true if you have a same sex marriage.
The state of California does allow a deduction.
I don't want to confuse the issue but I have found a number of small businesses treat the money the employee pays to the group plan for their employees and maybe children as if it automatically is pretax dollars. This is not the case unless you have a 125 plan or maybe a health reimbursement account set up.
Please consult your accountant on this and if you would like to receive information on how the Federal government imputes the tax please let me know.


Scott Hauge
President, Small Business California
shauge@cal-insure.com
415-680-2188

Small Business California

Small Business California recognized San Diego Gas& Electric and Frank Spasaro for their efforts in implementing On Bill Financing for small businesses. The ceremony was at the Army Navy Academy in San Diego which was one of the first organizations to take advantage of On Bill Financing. They received from San Diego Gas &Electric a loan at 0% interest and have paid it back in about one year using the savings on their energy bill. They said had it not been for On Bill Financing they would not have been able to take advantage of the cost savings available to them by the retrofit.
Small Business California created this program in California. While San Diego Gas & Electric is clearly in the lead on this, PG&E and Southern California Edison have come on board and will also be implementing an On Bill Saving program.
You may not be aware that Small Business California has Intervener status at the California Public Utilities Commission and we have pushed hard move this program forward. We are also playing a major role Nationally in pushing for On Bill Financing and have been in discussion with the SBA about this. Hank Ryan our Executive Director has been incredible in representing us on this issue.
On another front you all are aware that Small Business California sponsored SB 869 which goes after businesses that are not providing workers compensation coverage for their employees. The second batch of letters have been sent by the Workers Compensation Rating Bureau to employers that were provided to them by EDD. As was the case with the first 500 letters sent 15% of the businesses that received these letters had no workers compensation coverage. It is clear that there is major problem in California with businesses literally breaking the law and hurting legitimate businesses that are playing by the rules.
I hope you agree that Small Business California is making a difference for small businesses in California. If you haven't done so already please join our organization. The cost is $150 for businesses with less than $1 million receipts and $300 for those over $1 million.We need your help to. You can find out what we are doing by visiting our website at http://www.smallbusinesscalifornia.org/
The application for membership is available on the website.
Scott HaugePresidentSmall Business California2311 Taraval StreetSan Francisco, CA 94116shauge@cal-insure.com415-680-2188

SB-Cal Activities

You all know that SB Cal is the lead small business organization in the state on energy issues. What you may not know is that we have intervener status at the California Public Utilities Commission. Hank Ryan our Executive Director represents us and in my opinion is the most knowledgeable person in the state on these issues. Yesterday he filed his comments to the CPUC regarding On Bill Financing. On Bill Financing exist in California due to his efforts. I also want to note that San Diego Gas &Electric is approaching $2 million in On Bill Financing and they have clearly been the leader with the Investor Owned Utilities.

Based on our survey the number 2 issue for small businesses in California is education and workforce development. Ginne Mistal, our board member in Redding, is working with the California Workforce Investment Board to develop best practices of local Workforce Investment Boards around the state.On September 11, she went to a meeting of the California Workforce Association and presented the questions SB-Cal and the California Workforce Investment Board developed. I might note that we had a lot of assistance from NORTEC who run some great programs in I believe 10 counties in the Redding, Chico, Yuba area.

Scott Hauge
PresidentSmall Business California

Small Business Exemption

You all have heard by now that the Senate and Assembly passed a budget. The good news is we got an exemption for small businesses. The bad news is that instead of getting the exemption for businesses under $5 million it is for businesses under $500000.

We of course are disappointed with the reduction but without the leadership of Small Business California and the 35 associations that fought for the this there would have been no exemption.

Scott

Loss Carryover Letter

Dear CA Small Business:

Please copy and paste the letter text below to your company letterhead and send to me at shauge@cal-insure.com. Please fill in your name, title, and comany name. Thank you.





July 25, 2008


The Honorable Dave Cogdill and The Honorable Don Perata
California State Senate
Sacramento, CA 95814

The Honorable Karen Bass and The Honorable Michael Villines
California State Assembly
Sacramento, CA 95814


Re: Exemption for small businesses from loss carryover tax suspension

Dear Senators and Assembly Members:

I am a small business owner in California. I am very concerned about the proposal from the Senate/Assembly supporting the Net Operating Loss Carryover.

This proposal is being put forth as a big business tax loophole, but in reality it effects over 6 small businesses (under $5 million in receipts) for every 1 large company.

This measure would have a devastating impact on start-up businesses, small businesses interested in expanding and small businesses impacted by the cyclical economy.

I urge you to seriously consider the impact of this measure and if it does move forward, exempt businesses with less than $5 million in revenues. Thank you.



Regards,

Name
Title
Company

California Tax Measure Adversely Impacts Small Business: Please read!

Please see Press Release below:


Public Relations NEWS RELEASE


Client: Small Business California Date: July 23, 2008
San Francisco

Contacts: Paul von Beroldingen Scott Hauge, President
PVB Public Relations Small Business California
Off 415•751•1858 + Cell 415•264•8524 Off 415•680•2109 + Cell 415•699•9100
E-mail: paul@pvbpr.com E-mail: shauge@cal-insure.com

California Tax Measure Adversely Impacts Small Business

Organizations working on behalf of 3.2 million small businesses

request exemption from loss carryover tax suspension

SAN FRANCISCO, July 23 — Prestigious business organizations throughout California are urging Sacramento legislators and Governor Arnold Schwarzenegger to grant an exemption for small businesses in a proposed tax measure suspending net operating losses for three years.
The controversial tax measure — one provision in a state budget plan calling for $8.2 billion in new taxes — is designed to close a loophole for large corporations and generate $1.1 billion for the state. But small businesses earning less than $5 million in revenue may suffer the most negative effects.
“Although 80 percent of the total taxes would come from businesses with more that $5 million in revenues, more than six small businesses would be impacted for every large one,” according to Scott Hauge, founder and president of Small Business California, a business advocacy organization, and president of CAL Insurance & Associates in San Francisco.
“California’s economy is driven by 3.2 million small businesses that struggle to endure economic downturns, while investing in future growth and creating most of the new jobs at considerable personal and financial risk,” Hauge adds. “The issue is not just a ‘small business’ issue. It's really about the state's overall economy.”
Companies in California are permitted to carry forward net operating losses incurred in one year and use them as deductions against earnings in future years. The proposed budget would suspend the losses for three years. If a business operates at a loss — often the case with start-ups or businesses that add employees, expand inventory or upgrade equipment — it could not carry over that loss in subsequent years to mitigate the tax burden.

(more)


Tax Measure Adversely Impacts California Small Business — NEWS RELEASE Page 2 of 2


The list of 29 organizations signing a letter to state legislators requesting the exemption includes key chambers of commerce, local merchant groups, and statewide manufacturing and building associations:
Asian Business Association of Orange County
Associated Builders and Contractors of California
Building Owners and Managers Association of San Francisco
California Association of Competitive Telecommunications Companies (CALTEL)
California Association for Micro Enterprise Opportunity (CAMEO)
California Chapter of the American Contractors’ Association
California Employers Association
California Fence Contractors’ Association
California Metals Association
Engineering Contractors' Association
Flasher/Barricade Association
Golden Gate Restaurant Association
Los Angeles National Association of Women Business Owners
Marin Builders’ Association
Napa Chamber of Commerce
National Association of the Remodeling Industry San Francisco Bay Area
Oakland Metropolitan Chamber of Commerce
Plumbing Heating and Cooling Contractors of California
San Diego Chamber of Commerce
San Francisco Chamber of Commerce
San Francisco Council of District Merchants Associations
San Francisco Hispanic Chamber of Commerce
San Francisco Marina Merchants Association
San Francisco National Association of Women Business Owners
San Francisco Small Business Advocates
San Francisco Small Business Network
Small Business California
Small Business Majority
Small Manufacturers Association of California

# # #
NEWS MEDIA CONTACT:
Paul von Beroldingen Scott Hauge, President
PVB Public Relations Small Business California
Office: 415•751•1858 Office: 415•680•2109
Mobile: 415•264•8524 Mobile: 415•699•9100
E-mail: paul@pvbpr.com E-mail: shauge@cal-insure.com

SB-Cal Successes

Last week was a good week for Small Business California. At a Workers Compensation Forum in Monterey John Duncan the head of the Department of Industrial Relations announced the implementation of SB 869. This bill as you may recall had EDD send to the Workers Compensation Insurance Rating Board [WCIRB]names of businesses to see if they have workers compensation coverage. The underground economy is a big issue for small businesses as you well know and this will begin to level the playing field. Mr. Duncan indicated that the first 500 names were sent to the WCIRB last week and applauded Small Business California for putting forth this bill.

Small Business California owes a big debt of gratitude to Christine Baker and Lach Taylor from the Commission on Health and Safety and Workers Compensation and to Lori Kammerer our lobbyist in Sacramento.

Secondly our bill AB2181 Ruskin was passed on consent calendar in the Assembly. This bill requires insurers to provide information to businesses upon there first lost time workers compensation claim about possible lawsuits that could arise from 132a claims[wrongful termination] and Fair Employment and Housing[ FEHA] claims for not following the interactive process.

Lastly I made a presentation at the Workers Compensation forum in Monterey on Thursday representing small business and the impact of the workers compensation reforms and our vision of what is going to be the future of workers compensation for small businesses in California.

One final note for those of you that may not have heard the WCIRB has recommended no increase in workers compensation rates in July.

Scott Hauge
President, Small Business California.

SB 1490: Independent Contractors

We all know that misclassification of Independent Contractors is a problem in California. We also know that there is a lot of confusion by small business owner what constitutes an Independent Contractor and in some cases the definition by EDD and the IRS are different.
SB1490 has been introduced by Senator Padilla. What it does according to the analysis by the Senate Committee on Labor and Industrial Relations

" Requires a person employing labor in California to provide an individual hired as an independent contractor a form developed by EDD that includes 1 a notice that the individual has been hired as an independent contractor 2 the factors EDD uses to determine to determine whether a person is an employee or an independent contractor 3 a statement explaining the impact that the individual's status has on his or her tax obligations and eligibility for labor and employment protections and 4 a notice of the individual's ability to request from EDD a determination as to whether the individual is an employee or independent contractor and means by which this determination may be obtained.

Requires an employer to maintain, for not less than two years, specified records identifying all persons hired as independent contractors and to make those records available for inspection upon request of EDD, a member of the Industrial Welfare Commission, or the Department of Industrial Relations.

Grants an individual hired as an independent contractor the right to request a determination by EDD as to whether he or she is an employee or independent contractor.

Expands the application of existing civil penalty and misdemeanor provision to the compliance requirements for record keeping and access with respect to independent contractors
Gives EDD power to develop the required form, to process the request for a determination, and to take all steps reasonably necessary to carry out the duties relating to independent contractors specified in the bill."

Please let me know your thoughts on this? Do you think this is important to small business. I will be talking to the point person in Senator Padilla's today. Your views will be expressed

Small Business: 70 Million Strong and Voting

Small Business California Partners with NSBA to Kick-off Outreach Campaign

Small Business: 70 Million Strong…And Voting

Washington, D.C. — More than one in two people in the U.S. private workforce work for or run a small business, according to data from the U.S. Small Business Administration Office of Advocacy and U.S. Census Bureau. To underscore the significance of this number, the National Small Business Association (NSBA) today unveiled a broad campaign, “Small Business: 70 Million Strong…And Voting” to educate lawmakers, candidates and the public on the importance of small business.

“For the past 15 years, small business has created on average 93.5 percent of all net new jobs and comprised 99 percent of all employers, yet continues to be an afterthought for many lawmakers and candidates,” stated NSBA President Todd McCracken. “This campaign will help us change how people think and talk about small business.”

NSBA is working closely with affiliate members across the country to get the word out about the significance of the overall small-business community. The campaign aims to address the lack of small-business focus in the 2008 election season by urging every small-business owner and employee in the U.S. to speak out as part of the overall small-business community.

The importance of small business isn’t disputed. In fact, in the 2007 Harris Interactive Poll, Confidence in Leaders of Major Institutions, 54 percent of adults expressed a great deal of confidence in small-business owners—the only group in the past three years to garner such a high rating from a majority of people. The target for NSBA is to get people talking about, and recognizing, how truly broad and significant the small-business community is to the U.S. economy.

“Beyond the very positive attitudes people have about small business, we want to drive home the point that small business comprises 33 percent of the voting population in the U.S.,” stated Scott Hauge. “We want to let people know that the small-business community is a force to be reckoned with.”

Since 1937, NSBA has advocated on behalf of America’s entrepreneurs. Reaching more than 150,000 small businesses, NSBA is proud to be the first national small-business advocacy organization in the United States.


Scott Hauge
President
Small Business California