Monday, June 07, 2010

Support SB 1373/ 1099s

On Wednesday Small Business California sponsored bill SB 1373 will be coming before the Senate Revenue and Tax committee.

This bill will level the playing field between paving contractors and vertically integrated manufactuers/ contractors. Currently vertically integrated manufacturers/ contractors pay a sales tax based on the cost of materials that go into products like asphalt and paving contractors pay a sales tax based on the cost of the final product. This gives the vertically integrated manufacturer/contractor a 4% to 5% bid advantage.

Most of the paving contractors are small businesses and the vertically integrated manufacturers/ contractors are for the most part big business. We have seen many cases where these paving contractors have lost bids due to the sales tax advantage.

Many of you have sent emails to Senator Leno, author of 1373, supporting his legislation. Please see below members of the members of the Revenue and Tax Committee. If you are in one of the committee members district please send an email supporting SB1373. I know this probably doesn’t impact you directly but we need to show small business solidarity.

Lois Wolk (Sacramento, San Joaquin, Solano, Yolo), Chair:

Mimi Walters (Orange, Tustin, Laguna Niguel, Laguna Hills) Vice Chair:

Elaine Alquist (Santa Clara):

Roy Ashburn: (Bakersfield):

Alex Padilla: (Los Angeles)

Last week Harry Moos represented Small Business California and the Plumbing Heating and Cooling Contractors of California at a Dan Lungren press conference supporting Congressman Lungrens HR 5141.

As you have read here before the recently passed health bill had a provision that would require businesses to file 1099s on all businesses that you pay$600 or more to. Currently you only need to file 1099s for businesses that provide you services and who are not incorporated. What this means for my business, CAL Insurance, is that I currently file 25 1099s. Under the new law I will have to file about 700.

HR 5141 will repeal this requirement. Currently there are 70 cosigners on this bill. All are Republicans. The Democrats many of which recognize the burden this places on small business are not supporting this because the Congessional Budget Office has said this requirement will raise $17 billion over 10 years.

Write your Congressman and ask them to support HR5141.

One final comment. I don’t want anyone to think my above comments are a slap at Democrats. There is another bill HR 4302 which will provide for the waiver of fees on SBA loans, 90% guarantees on SBA loans and increase the size of SBA loans to $5 million. On that bill we have 63 Democrats and no Republicans. The partisianship in Washington is really hurting not just small business but the people of this country.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

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