Law & Entrepreneurship News

Small Business Update 4/29/05

I am going to post stories from the past three days. Small Business Week has opened the floodgates to small business articles so here is a sampling:

- House Committee passes Small Business Checking Act which would allow small businesses to earn interest on checking accounts (NFIB)

- How women can enhance their bargaining skills (Business Week)

- The reasons why many startups collapse (Business Week)

- Tips on where to find funding (Business Week)

- The San Francisco Bay Guardian is calling on politicians to fight President Bush's SBA budget cuts

- An American Express survey shows that small business owners are optimistic about their growth prospects over the next six months (Inc.com)

- SBA Office of Advocacy testifies in front of Congress in an effort to eliminate the tax gaps between small business treatment compared to its big business counterparts (Press release here)

- Entrepreneur.com reports on why small businesses are vital to America

- SBA Office of Advocacy testifies in favor of regulatory reform

- Sen. John Kerry calls out the Bush administration and the SBA on its treatment of women owned businesses

IRS to Offer Free Tax Help to Small Businesses

In recognition of National Small Business Week, the Internal Revenue Service has announced an abundance of free resources available to assist the nation’s 45 million small business and self-employed taxpayers with their tax responsibilities. And, they are all just a mouse-click away.

The small business section of IRS.gov provides a one-stop resource for information on starting and operating a business. On this site taxpayers can:

• Learn about employment tax requirements.
• Make tax payments.
• Find out how to set up and distribute retirement plans.
• View a streaming video of a small business tax workshop.
• Order free products like a tax calendar or small business resource guide.

Small Business Brief 4/26/05

- Tips for small business owners on delegating responsibility

- Pittsburgh Tribune Review has a nice article on financing startups and small businesses

- The Salt Lake Tribune has a nice story on how microloans have helped Utah entrepreneurs and how the Utah microloan program works

Happy Small Business Week

With finals taking up a majority of my time for the next couple of weeks, I am going to be providing quick hits (with links) for what is going on in the small business world instead of longer articles.

Yahoo.com is reporting that President Bush has declared this week small business week with programs and ceremonies to celebrate America's small businesses

Inc.com is reporting on the fastest growing counties in terms of job growth (interpreting a recently released Bureau of Labor Statistics report).

A Wal-Mart survey is indicating that small business economic confidence is waning.

The Chicago Tribune is reporting that spending on technology will be slow for small businesses this year.

House Passes Energy Bill with $8 Billion in Tax Breaks

The House of Representatives passed a new bill yesterday with $8 Billion of targeted tax incentives. The Energy Policy Act of 2005 includes provisions that would shorten recovery periods for natural gas pipelines and air pollution control facilities, ease restrictions for deductible contributions to nuclear decommissioning funds, exempt from tax-exempt bond arbitrage rules some prepayments for natural gas, and increase the limitation for the oil depletion deduction for small refiners.

The Bill also would provide limited incentives for residential solar- powered water heating, photovoltaics, and fuel cells and would create a 15 percent business tax credit for the purchase of fuel cells. Both individuals and businesses would be allowed to use several new energy credits against the alternative minimum tax. The Senate is expected to begin working on an energy bill within the next two weeks.

The House vote was 249 to 183  to pass the comprehensive energy bill, but only after narrowly overcoming a Democratic objection.

Rising Interest Rates Sneaking Up On Small Businesses

The AP is reporting that the realities of the interest rate hikes over the past ten months are starting to creep into the small business consciousness due to increased capital needs because of inflation and skyrocketing energy costs.

Family Entertainment and Copyright Act Passes House

The Family Entertainment and Copyright Act, passed last year by the Senate, has passed the House and is now in President Bush's hands.

The Washington Post reports:

The bill would protect technology that lets people automatically skip or mute sections of commercial movies that contain foul language, violence or nudity. The bill would assure manufacturers of DVD players and other devices that use the technology that they would not be violating Hollywood copyrights. The bill also would make it a federal crime to use video cameras to record films in movie theaters, and it would set penalties of up to 10 years in prison for anyone caught distributing a movie or song before its commercial release.

Bush Signs Bankruptcy Bill

President Bush signed legislation today that marks the biggest overhaul of our bankruptcy system in a quarter century.

The bankruptcy bill signed by President Bush will go into effect in six months. The major change under the bill is that debtors seeking to file bankruptcy will be subject to a means test. Debtors with incomes above their state’s median and who can pay back at least $6,000 over five years will have to file a Chapter 13 bankruptcy. These debtors will be required to enter into a payment plan to pay back some of their debt over time.

Currently, the court has discretion to determine whether an individual is required to file Chapter 13 rather than Chapter 7.  Chapter 7 allows debtors to discharge their debts by liquidating certain assets and paying what they are able from the money generated.

President Bush has long supported this bill. He stated, "Bankruptcy should always be a last resort in our legal system. If someone does not pay his or her debts the rest of society ends up paying them."

Opponents of the bill feel that its impact will fall the hardest on low-income individuals, minorities, the elderly, and single mothers. It will be especially hard on those who suffer a medical crisis or lose their job.

Supporters of the bill see it as a long awaited change. The bill has been around in varied forms for the past eight years. Supporters feel that it will prevent abuse of the system by individuals seeking a way out of gambling debt, child support, bills resulting from compulsive shopping, and other abuse of the bankruptcy shelter provisions.

Innovation And Entrepreneurship Study

The SBA Office of Advocacy has released an excellent study that statistically analyzes the connection between entrepreneurship and innovation in 394 areas in the country. Please click here for the full report. Please click here for the research summary.

House Passes Bankruptcy Bill

The bankruptcy bill passed in the House of Representatives yesterday by a 302-126 vote.

Congressional approval of the bill was much expected this session, especially after the bill passed in the Senate last month by a 74-25 vote. The bill has come up but failed to pass in previous sessions largely due to a controversial abortion-related amendment that was not included in this bill this session. While largely a republican-supported bill, it has also gained the support of many democrats. Seventy-three democrats from the House voted for the bill.

The bill will make significant changes to our bankruptcy system, many people will be unable to completely discharge their debts under Chapter 7. Instead, individuals will be subject to a means test. Those with incomes above their state’s median will have to enter into a repayment plan under chapter 13. Opponents of the bill feel that it will punish consumers while aiding the credit industry.

President Bush has long been a supporter of the bill. Shortly after the House passed the bill President Bush stated, "I look forward to signing the bill into law." It may be presented to President Bush as early as next week.