New 1099 Requirements

It seems as though the US Chamber is stepping into this discussion. See below.

Thank you to everyone that said they would send a letter of support for HR 5141. I will have a letter to you by Monday.

I talked to Congressman Lungrens office yesterday and they said what will be important in any letters sent will be the affect on your business. For example my company does 25 1099s. The new requirements will force me to do 700. Give some thought as to how it will impact you.

Thank you also to all the association that agreed to sign a joint letter. I will get the letter to you Monday.

If any other associations on this email want to sign on please let me know. I will be sending to every House member in California.

Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188


Letter supporting H.R. 5141, the "Small Business Paperwork Mandate Elimination Act"

April 29, 2010

The Honorable Dan Lungren
U.S. House of Representatives
Washington, DC 20515

Dear Representative Lungren:

The U.S. Chamber of Commerce, the world’s largest business federation representing the interests of more than three million businesses and organizations of every size, sector, and region, strongly supports H.R. 5141, the “Small Business Paperwork Mandate Elimination Act,” which if passed into law, would repeal the onerous paperwork burdens imposed on business by the ill-conceived expanded information reporting mandate contained in Section 9006 of the “Patient Protection and Affordable Care Act” (PPACA). This provision was used as an unrelated “pay for” in the PPACA and it should be rescinded based on the merits of the provision alone.

Unless this section is repealed, businesses across the nation will be subjected to the folly of data collection and information filing on virtually all business-to-business transactions they make aggregating $600 or more in a year at a time in which many can least afford it. When the United States is depending on the small business community to generate jobs and grow the economy, lawmakers are diverting their precious time and resources to collecting volumes of information and filling out mounds of new paperwork for the government.

If allowed to be implemented, Section 9006 of the PPACA will also have a chilling effect on new business relationships, most of which will be small businesses and startups. Many businesses in an attempt to reduce data collection and paperwork burdens will simply reduce vendors and refuse to entertain new business dealings. This will have a disproportional impact on small businesses and entrepreneurs attempting to get a foot in the door.

The ultimate irony of these new burdens is that the IRS neither has the resources nor the ability to use the new information to reconstruct an accurate picture of a company’s revenues since a large volume of business-to-consumer transactions are not reported. While the vast majority of compliant taxpayers will bear the cost of implementing this law, it will have only minimal benefit as a government tool in reducing non-compliance.

Moreover, the U.S. tax system is only as strong as the willingness of its participants to voluntarily comply. Imposing vast new data collection and reporting requirements may be viewed by many small business owners as unreasonable and overreaching. In the end, this could serve to undermine confidence in the government and further frustrate tax collection efforts.

Ninety-six percent of the Chamber’s members are small businesses with fewer than one
hundred employees. On behalf of its members, the Chamber thanks you for introducing this important bill and looks forward to working with you on its passage.


Sincerely,
R. Bruce Josten

1099 Requirements and Small Business

Small business traditionally has not been involved in the legislative process. This drives me crazy but when I ask why, you tell me you are to busy and the issue doesn’t affect you.

While I think this is wrong and we get hurt by legislation consistently, we now have an issue that effects almost every small business in this country.

I have sent out emails telling you about 1099 requirements under the new health care bill. These take affect in 2012 . If you think it doesn’t impact you you are wrong.

For my business, I currently send out 25 1099s. The new requirement will have me send out about 700.

I send out a challenge to you.. This email goes to 4000 small businesses. I don’t think there is a single one of you that won’t be impacted by this provision in the health bill.

If you think you re not impacted let me know. I will personally pay you $100 and let all on the email know how many of you have shown I am wrong. My only caveat to this is if you feel this may reduce competition from the underground economy this is not quantifiable and will not be considered.

However feel free to send this to anyone you want and my offer stands to them.

I am grandstanding I know but this is serious. I am being told we can’t win this battle and that is probably right.

Do you want Small Business California to fight the fight and will you join us?

Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
415-680-2188
shauge@cal-insure.com

1099s/ Worker Compensation/ Arizona Boycott

Yesterday I told you about the requirement that was slipped into the health bill that businesses would have to file 1099s on all providers of goods and services over $600 to their business. This will now include corporations so you will have to do so for companies like PG&E, IBM as well as smaller corporations.

I had one of the people on the email list that said his business will now have to file about 3000 new 1099s at a cost he estimates at about $1300. He pointed out something I hadn’t thought about and that is he will also have to get the Federal ID number for all of these businesses.

I have verified that this requirement will take effect 2012 and it is estimated that it will raise $17 billion over a 10 year period.

Dan Lungren from California has introduced HR 5141 to repeal this onerous provision. Small Business California has been in contact with his office and we strongly suggest you write a letter supporting this legislation. If you want to do so send me a return email and I will send you a suggested letter. If you are in the Congressman district [ Sacramento/ Parts of the Mother Lode] let me know that also.

I have been trying to find rate filings for increases in workers compensation. It seems that most of the major players have not done so yet but what I do have is Everest will be filing a 5% increase, First Comp 13.5% Hanover 7.1% and Benchmark 12.34. There are other filings but they are really small carriers. As I have said before I don’t expect major increases in July except for a few carriers but watch out for January.

Yesterday I was interviewed on a local television channel on boycotting Arizona over their new immigration law. SF is not the only City looking at this and I believe the state is also considering something. In SF there is discussion of not allowing City contracts to businesses doing business in Arizona. My personal opinion is that I think it is a horrible law and I hope it gets struck down by the courts but I don’t think there should be a boycott. What do you think.

Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188

Small Business and 1099s

It has just come to my attention that the Health bill recently passed had a provision slipped into it that will require all businesses to file 1099s to any provider of goods and services over $600 in a year.

It appears this will start in 2012 but I am verifying this. For a $14 trillion dollars US economy that is a lot of 1099s.

House member Dan Lungren is introducing legislation to repeal this.

Scott Hauge
President
Small Business California'
2311 Taraval Street
San Francisco, CA 94116
415-680-2811
shauge@cal-insure.com

Red Flag

AB 1771 passed the Assembly Public Safety Committee yesterday on a 4 to 0 vote. Voting in support was Jerry Hill from South SF, Curt Hagman from Diamond Bar, Danny Hill from Hanford and Jim Beall from San Jose. This is the Small Business California bill that would allow small businesses to bid on small contracts with state agencies. Currently they can only be done by prisoners.

The Red Flag rules which have been postponed for about a year will be enforced effective June1. These rules put in place by the Federal Trade Commission. The rule was designed to fight identity theft by requiring creditors with certain kinds of accounts to implement compliance programs to detect and prevent identity theft. Take a look at the website below to see if you are impacted by this. There is a $2500 fine for noncompliance.

Here is the website:

http://www.ftc.gov/bcp/edu/pubs/business/alerts/alt050.shtm

Small Business California sponsored bill SB1373 will be going before the Revenue and Taxation Committee on April 28. This bill levels the playing field for small businesses on paving work. It will require vertically integrated manufacturers[ businesses that manufacturer asphalt and cement and install the materials] to pay the same sales tax as the contractors that only do the work.

We are running into to strong opposition by vertically integrated manufacturers as it could effect as much as $10 billion of work. Thank you to all the associations and individuals that sent letters and a big thank to Betty Yee Chair of the Board of Equalization and Senator Mark Leno for authoring the bill

For those of you in San Francisco be sure and get your paperwork into the City for the Health Care Ordinance. It is due April 30.


Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188

SB 900/AB 1771 and Governor's Conference for Small Business

I just found out that Senator Alquist has introduced legislation to create a Health Insurance Exchange. This would be housed in the California Health and Human Services Agency. The Exchange will be governed by a board with gubernatorial and legislative appointments and would meet at least once every two months. We are tracking this legislation closely.

It is critical that small business have representatives on this board. Small Business California will be pushing hard to make this happen.

The bill number is SB 900 and you can get more information by going to www.leginfo.ca.gov

We are getting close to the Governor's Conference for small business. Please see below information. If you have not done so already please register for this event.

There has been added a session on the new health bill from Washington. I will be speaking at this event on this issue.

Assemblyman Tony Mendoza has introduced AB 1771 which would allow small businesses to bid on goods and services for state agencies currently provided by prisoners. The sale of prison goods and services is a $230 million dollar industry.

Small Business California has been quoted in numerous media outlets supporting this legislation.
Even though the Prison Industry Authority has considerable advantages such as lower labor cost and lower overhead we are only asking that small businesses be given the opportunity to bid on these contracts and the low bidder should be awarded the contract.

In these difficult economic times where small businesses are struggling to survive this does not seem unreasonable. Also the state may be able to save some money.

It is interesting to note that 30% of the prisoners or about 2000 are lifers.

What do you think?

Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188

Workers Compensation Results/SBS Funding Extended/Webinar/ Employer Lawsuits

The Workers Compensation Insurance Rating Bureau released April 14th the summary of Insurer Experience for 2009. The total written premium was $8.9 billion down from $10.7 billion for 2008. The average rate per $100 of payroll was down slightly from $2.37 to $2.35. This is down 63% from 2003. The accident year loss ratio was 75% up 6% from 2008. The combined loss ratio was not reported but in 2008 it was 108% and the estimate is that it will be around 120%.

So you are asking what does this mean. The pressure is on to increase rates and at some point they will go up double digits but I do not see it happening this year but look out for January. There will most likely be some increase in pricing but I do not see any dramatic increases this year. The caveat here is that some companies may increase premiums by double digit amounts but most won’t. State Fund is one of those companies you will see double digit increases

The Senate passed an extension of several of the American Recovery and Reinvestment Act provisions that were set to expire April 30th. These provisions include the higher guarantees for SBA 7a loans and fee waivers for 7a[ working capital and some real estate] and 504 loans[ real estate] The extension provides $80 million to extend these provisions until May 31 2010.
While this is clearly good news what we need is passage of S2869 which will extend these provisions to the end of the year and increase the loan size to $5 million and allow refinancing of 504 loans.

Some of you were on the webinar Wednesday on the impacts of the health bill on small and medium size businesses. We received great reviews of the webinar and we had about 115 people participate. What would you think of us doing another one of these in about three months? If you would like a copy of all the questions that were asked and the answers to these questions please let me know by return email.

The other day I was talking to a labor attorney and asked him what he was seeing in the way of litigation against businesses. His answer was that there has been an explosion of lawsuits for wage and hour violations. I strongly recommend you talk to your insurance broker about coverage for Employment Practices liability. This coverage also provides for wrongful termination, sexual harassment and discrimination along with some third party liability like ADA. Be sure to ask your broker about wage and hour and ADA as some Employment Practices policies do not automatically cover this


Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188

Health Bill Small Business Tax Credits

All of you are probably aware that the recently passed health bill provided for small business tax credits. Some of the details of those tax credits are:

Tax credits are available to small businesses in two phases:

Phase One -if you are a business with 25 employees or less and average wages of $50000 or less and pay at least 50% of the total premium for your employees coverage you can receive a credit up to 35% of the premium cost between 2010 and 2013.

Phase Two begins 2014 and if you meet the criteria you can receive a tax credit up to 50% of your health insurance cost. The full tax credit is available in both phases to employers with 10 employees or less who have an average wage of $25000 . The credit phases out for employers with between 10 to 25 employees with average wages between $25000 and $50000. The credit ends 2016.

The tax credits can be captured by a deduction on your federal income tax liability and can be carried back 1 year and forward 20 years.

Are you eligible for these tax credits?

If you are not providing insurance will this incentive be enough to get you to provide health insurance to your employees?

Would you be willing to talk to the media? If so send me your contact information and the number of employees you have.

If you want to learn more about this and other provisions of the health bill please join the webinar April 13 at 9AM. You must register and can do so by calling 800-399-5331.

Scott Hauge
PresidentSmall Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188

Health Care Webinar/CA Office of Economic Development

There is still room for more participants on the Webinar PrimePay, California Employers and CAL Insurance is doing April 13th from 9AM to 10. The topic is the impact of the recently passed health bill on small and medium sized businesses.

Our presenter Lucian Wulsin from the Insure the Uninsured Project will be presenting. Lucian is recognized as a health policy expert. There will be time for your questions. It is free but you must register.

To do so call 800-399-5331.

See below announcement of the opening of the Governors Office of Economic Development.

Scott Hauge
President Small Business California
2311 Taraval Street
San Francisco, CA 94116
415-680-2188


Small Business CaliforniaGovernor Schwarzenegger Establishes Office of Economic Development

Signs Executive Order, Appoints Director, Launches Web Site to Improve Communication between Businesses and State

Governor Arnold Schwarzenegger today signed an executive order establishing the Governor’s Office of Economic Development (GoED), a one-stop shop to help businesses acquire the direction, information and resources they need to invest, succeed and expand in California. The Governor appointed Joel Ayala, former president and chief executive officer of the California Hispanic Chambers of Commerce, as director of the new office.

“California is the best place in the world to do business, and by cutting red tape and streamlining functions, my Office of Economic Development will make the state an even better partner to the economy,” said Governor Schwarzenegger. “This office is exactly what businesses need to navigate through state requirements and take advantage of state resources, and Joel Ayala is exactly the person to head it up. He knows what it takes to create jobs and bring businesses to our state, and I am looking forward to working with him to boost California’s economy.”

Those who want to do business in California must interact with the state in many ways, such as establishing, registering and maintaining their businesses, obtaining permits and licenses, reporting required information and paying taxes. The state also has more than 100 individual economic development programs and services available to businesses. At GoED, experienced staff will guide businesses through the various state requirements and help them access state resources.

The idea of creating a one-stop shop to cater to California businesses needs was originally suggested as a part of the Governor’s 2004 California Performance Review <http://cpr.ca.gov/> and again in a February 2010 Little Hoover Commission <http://www.lhc.ca.gov/studies/200/report200.html> report. The office will have three defined functions: to promote California as a place to do business; to support businesses interested in starting, growing, financing, expanding or relocating in California; and to help those businesses facing challenges to operating in California.

GoED will be open for business beginning today and can be contacted toll free at 877-345-GoED (877-345-4633) or at http://www.business.ca.gov/ <http://www.business.ca.gov/> .GoED is being established, staffed and housed using existing state resources. The Administration is currently in the process of drafting legislation that will make GoED a permanent entity in state government.

Joel Ayala has been appointed to lead GoED as the director. Since 2007, he has been president and chief executive officer of the California Hispanic Chambers of Commerce. Previously, Ayala served as president and chief executive officer for the Orange County Chamber of Commerce from 2001 to 2007 and school director for adult education and corporate training at the Career Management Institute from 1994 to 2001. He was deputy probation counselor for the Orange County Probation Department from 1985 to 1993. Ayala is a member of the Orange County Presidents Council and a previous member of the Santa Ana Workforce Investment Board, Anaheim Workforce Investment Board, University of California, Irvine Alumni Association Board of Directors and the California Task Force for Small Business Department of General Services.

Ayala, 44, of Anaheim, earned two Bachelor of Arts degrees in political science and social ecology from the University of California, Irvine.This position does not require Senate confirmation and the compensation is $138,000. “I’m looking forward to working with the Governor, businesses and the people of California to improve the economy and get people back to work,” said Joel Ayala. “The development and growth of businesses is more important now than ever due to the economic hardships so many communities face. Improving California’s business climate will attract new businesses and allow greater prosperity for businesses that are already here.”

The full text of the Governor's executive order is below:

EXECUTIVE ORDER S-05-10

WHEREAS job creation and retention are critical to California’s economic well-being and quality of life; and

WHEREAS in 2009, the United States confronted the most severe economic downturn since the Great Depression; and

WHEREAS California was especially hard hit by the global financial crisis, and while the recovery has begun, economic growth remains modest and high unemployment persists; and

WHEREAS unemployment in the State stood at 12.5 percent as of February 2010; and

WHEREAS it will take aggressive action on the part of government and the private sector to ensure that California leads the recovery; and

WHEREAS good jobs enable Californians to achieve their potential and contribute to the economic performance of the State; and

WHEREAS California has led the world in innovation as the high-technology capital of the world, the biotechnology capital of the world, the agriculture capital of the world, the entertainment capital of the world, the aerospace capital of the world, and now the green-technology capital of the world; and

WHEREAS in 2009, venture capital investment in California led all other states, with approximately $8.9 billion of the $50 billion invested nationwide; and

WHEREAS in my State of the State Address this year, I announced a job creation package that will create or retain at least 100,000 jobs, and additional efforts are necessary to eliminate barriers in further creating jobs; and

WHEREAS I have just signed two important parts of this jobs package: a homebuyer tax credit and a sales tax exemption for companies purchasing green-technology manufacturing equipment; and

WHEREAS people who want to do business in California must interact with the State to establish and maintain their businesses, by obtaining permits and licenses, registering their businesses, reporting required information, and paying taxes; and

WHEREAS California has at least 100 individual programs and services across 28 separate state government entities that support economic development; and

WHEREAS the American Recovery and Reinvestment Act of 2009 will provide approximately $85 billion in cash and tax benefits to Californians; and

WHEREAS state-level services and resources for California businesses are disjointed, with an uneven geographical distribution of services, no centralized entity with broad expertise, no mechanism to focus efforts and measure results, and a lack of effective coordination with other government and private sector resources; and

WHEREAS some of these services and resources reside under the authority of other constitutional officers, including the Lieutenant Governor, the Treasurer, and the Secretary of State; and

WHEREAS from a business owner’s perspective, state government is not a collection of independent agencies, but rather one “state government” and therefore, business owners expect seamless services from the State; and

WHEREAS some who want to start a business in California do not know where to begin, and even some established business owners find it difficult to navigate the state bureaucracy; and

WHEREAS the State should simplify the path to the state-level resources and services that businesses need to grow and succeed in California; and

WHEREAS the California Performance Review and the Little Hoover Commission have also recognized this need for a central economic development entity, and action is needed. NOW,

THEREFORE, I, ARNOLD SCHWARZENEGGER, Governor of the State of California, by virtue of the power vested in me by the Constitution and statutes of the State of California, do hereby order effective immediately:

1. The Governor’s Office of Economic Development is hereby created. Its purpose is to promote California as a place to do business, to support those interested in starting, growing, financing, expanding or relocating a business in California, and to help, to the extent possible, those businesses facing challenges to operating in California. The Office of Economic Development shall exist within the Governor’s Office, and shall be headed by a director designated by the Governor.

2. The Office of Economic Development shall be the state’s lead entity for economic development coordination with all public and private entities and shall perform the following functions:

a) Leading the State’s business-oriented outreach and marketing efforts and promoting California as a place for business investment and job creation, working with private-sector, nonprofit and other government entities;

b) Creating a Web portal that will provide one-stop access to state-level information and resources for businesses;

c) Serving employers, corporate real estate executives and site location consultants who are considering California for business investment and expansion;

d) Communicating the business advantages of California locations for new business investment and expansion;

e) Providing site, workforce training and infrastructure availability and cost information;

f) Providing permit and regulatory assistance;

g) Facilitating participation in state capital financing, grants, loans, tax credits, and other incentives;

h) Supporting the State’s small businesses by providing information about accessing capital, regulatory compliance, state procurement and state initiatives that support small businesses;

i) Encouraging collaboration among research institutions, start-up companies, local governments, venture capitalists and economic development organizations to promote innovation;

j) Working with the federal government to leverage economic development programs and to foster relationships with international counterparts to help address barriers to trade, find business partners and promote California’s strengths; and

k) Conducting ongoing research about how California can remain on the leading edge of innovation and emerging sectors.

3. The Office of Economic Development shall be created with existing resources and shall be staffed with personnel from agencies and departments whose functions relate to economic development, including small business promotion. These agencies shall include, but not be limited to, the Labor and Workforce Development Agency, the Business, Transportation and Housing Agency, the Environmental Protection Agency, the Natural Resources Agency, the State and Consumer Services Agency, the Department of Food and Agriculture, the Office of the Chief Information Officer, and the Office of Planning and Research.

4. Each member of the Cabinet shall identify a senior manager within his or her agency to coordinate business support activities with the Office of Economic Development.

5. The Office of Economic Development shall operate a Web portal, as described above in paragraph 2(b), and shall be prepared to respond appropriately and promptly to all requests for information and assistance from businesses that need help interacting with California state government.

a) The Web portal shall provide assistance with: establishing or registering a business; license, permitting and registration requirements; tax requirements; and building codes and zoning.

b) The Office of Economic Development shall ensure all state Web sites focused on economic development and business support are user-friendly and provide accurate, updated resources.

6. The Director shall seek advice and input from local government officials, economic development agency officials, and industry leaders.

IT IS FURTHER ORDERED that the agencies and departments under my executive authority shall cooperate in the implementation of this Order. Other entities of state government not under my direct authority are requested to assist in its implementation. This Order does not and is not intended to create any rights or benefits, substantive or procedural, enforceable at law or in equity, against the State of California, its agencies, departments, entities, officers, employees or any other person.

I FURTHER DIRECT that as soon as hereafter possible, this Order shall be filed with the Office of the Secretary of State and that widespread publicity and notice be given to this Order.

IN WITNESS WHEREOF I have hereunto set my hand and caused the Great Seal of the State of California to be affixed this 8th day of April 2010.

ARNOLD SCHWARZENEGGER
Governor of California

ATTEST:
Debra Bowen

New for 2010: Tax Credit Helps Small Employers Provide Health Insurance Coverage

Mark Herbert from Speakers Pelosi’s office sent me information that outlines the tax credits available to small businesses under the health bill. Note they are available now.

Please see below

The money given the SBA to continue the 90% guarantee of 7a and 504 loans and the waiver of fees is expected to run out in the next couple of weeks. It was expected that the $40 million of interim money would last until the end of April but it appears this will not be the case. If the money does run out it will be the third time in the last 6 months. What small business needs is a permanent solution. We need the passage of S2869 which both Senator Feinstein and Boxer have signed onto.

Small Business California is working with the National Association of Government Guaranteed Lenders and the National Small Business Association to get this done. One of our members Jim Baird of Bay Area Development is working with the Association of 504 lenders also in this effort.

You all know that Small Business California is headquartered in San Francisco. You also know that San Francisco has some quirky politics [I am being nice here]. The Board of Supervisors recently passed a resolution to make Monday a meatless day in SF. A number of years ago the Wall Street Journal wrote an article entitled “Who needs Oprah when you have the Board of San Francisco Supervisors”.


Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188



WASHINGTON ― Many small businesses and tax-exempt organizations that provide health insurance coverage to their employees now qualify for a special tax credit, according to the Internal Revenue Service.

Included in the health care reform legislation, the Patient Protection and Affordable Care Act, approved by Congress and signed by President Obama on March 23, the credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees.

“This credit provides a real boost to eligible small businesses by helping them afford health coverage for their employees,” said IRS Commissioner Doug Shulman. “We urge small businesses and tax-exempt employers to look closely at this important tax break - which is already effective - to see if they qualify.”

The maximum credit is 35 percent of premiums paid in 2010 by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. In 2014, this maximum credit increases to 50 percent of premiums paid by eligible small business employers and 35 percent of premiums paid by eligible employers that are tax-exempt organizations.

The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ low and moderate income workers. It is generally available to employers that have fewer than 25 full-time equivalent (FTE) employees paying wages averaging less than $50,000 per employee per year. Because the eligibility formula is based in part on the number of FTEs, not the number of employees, many businesses will qualify even if they employ more than 25 individual workers.

The maximum credit goes to smaller employers – those with 10 or fewer FTEs – paying annual average wages of $25,000 or less.

Eligible small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011. For tax-exempt employers, the IRS will provide further information on how to claim the credit.

The IRS will use postcards to reach out to millions of small businesses that may qualify for the credit. The postcards will encourage small business owners to take advantage of the credit if they qualify.

More information about the credit, including tax tips, guides and answers to frequently asked questions, is now available on the IRS Web site, IRS.gov.

Internal Revenue Service
Governmental Liaison for California & Nevada

David versus Goliath Support SB1373

Yesterday we got great news that Betty Yee the Chair of the Board of Equalization will be sending a letter of support for SB1373.

This is Small Business California’s bill that would require vertically integrated manufacturers[these are manufacturers that make asphalt and concrete and then bid on the construction project] to pay the same sales tax as small contractors when they only do the construction work. Right now these vertically integrated manufacturers have a competitive advantage of between 6% and 7% and this bill will level the playing field.

We now need your help.

You might be saying to yourself this doesn’t affect me. Why should I send an email? The reason is that small business is only going to be effective when we work together. This clearly is a case of inequity for small contractors. It is the big guys versus the little guys. I think you would hope that when an issue effects your industry that you would get the support of other small businesses not impacted.

Please send an email to Bob Hartnagel in Senator Leno’s office. His email is:

Bob.Hartnagel@sen.ca.gov

The letter very simply is -

Dear Senator Leno,

As a small business I strongly support SB1373 that will correct an inequity in the Tax Code and level the playing field for small business when competing against big companies. We appreciate your leadership on this.

Sincerely

Your name
Your company

Cc Revenue and Tax Committee

Please send a copy to me and I will make sure the Revenue and Tax Committee gets a copy of your email. I think this is doable in less than 5 minutes and it will make a difference.


Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188

HIRE Act/ Workers Compensation/ Health Webinar

Please see information from Rich Gunn, of Burr Pilger Mayer, regarding tax credits available to business. Thanks Rich for sending.

Yesterday a committee of the Workers Compensation Insurance Rating Bureau decided not to do a midyear recommendation on workers compensation rates. It is expected the full Board will follow next week.

This does not mean companies will not make new filings July 1.

At some point rates are going to go up dramatically. Rates have gone up for most classes of business but they have not been dramatic except for construction and State Fund. With a projected combined loss ratio of 125% to 130% for 2009 the pressure is there but no one knows when.

Cal Insurance, the California Association of Employers and PrimePay will be holding a webinar April 13th at 9AM discussing the recently passed health legislation. The Presenter will be Lucian Wulsin the head of the Insure the Uninsured Project and partner of Small Business California. Lucian is a recognized expert on this and he will answer your question about how the health legislation will affect your business. If you are interested in participating let me know. It is free but we can only accommodate 200 callers.

Scott Hauge
President
Small Business California
2311 Taraval
StreetSan Francisco, CA 94116
shauge@cal-insure.com
415-680-2188




President Signs HIRE Act into Law Creates New Tax Incentives

On March 18, President Obama signed into law the Hiring Incentives to Restore Employment (HIRE) Act (H.R. 2847). The Act includes provisions designed to spur job growth and help business owners.

The effective date for many of its provisions is March 18, 2010. This means that provisions like the up-to-$1,000 credit for "retained workers" (under Act Sec. 102) apply for any tax year ending after March 18, 2010.

Below we have highlighted key business and offshore provisions.

Business Tax Changes in the 2010 HIRE Act:

Extension of enhanced small business expensing (Section 179) retaining the $250,000 expensing election

Payroll tax holiday eliminating the current 6.2 percent employer Social Security tax for eligible new hires

Up-to-$1,000 business tax credit for keeping eligible employees for at least 52 consecutive weeks

Note: The HIRE Act does not extend the "bonus depreciation" tax break that was also available for business equipment purchases in 2009

Offshore Anti-abuse Provisions in the 2010 HIRE Act

Increased disclosure of beneficial owners

Foreign financial asset reporting

New reporting rule for PFICs

IRS will be authorized to require a financial institution to electronically file returns with respect to any taxes withheld by the financial institution even though the financial institution files less than 250 returns during the year

Provisions related to foreign trusts and imposition of a minimum penalty of $10,000 on any such failure to file

To review each provision in-depth please go to this link:

http://tinyurl.com/yh7wrkv

For further information contact Rich Gunn at rgunn@bpmcpa.com