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.

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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

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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