posted 05-28-1999 05:24 PM               

The CoSB heard speakers this week on Electronic Commerce: The Benefits and Pitfalls of Conducting Business over the Internet.

You can get the full text of Opening Statements and Prepared Testimony and check it out for yourself.

In capsule, and of interest to nanocorps:

Chairman Jim Talent: The Committee is concerned because small businesses are not taking advantage of e-commerce potentials and may lose market share to companies that do stay on top of Internet technology.

According to projections by IDC, by 2000, 46 million American consumers will be buying on-line, each spending an average of $350. Yet, E-marketer reported that fewer than 2 percent of the 7 million US small businesses with fewer than 100 employees conduct on-line transactions.

Security, customer service and "theft of intellectual property" (e.g., music industry losing control of its product "due to illegal free downloads") are three issues of keen interest to the CoSB.

Sohodojo note: the "intellectual property" issue needs to be very well clarified to Congress. Lawmakers should be educated to encourage industries beleaguered by "loss of control" to develop new ways of doing their business rather than expect a flood of protective legislation. We need to watch this one carefully.

Daniel O. Hill, Small Business Administration (SBA): The Small Business (SB) spectrum includes two poles -- SBs that do not understand the Internet thus see no need for them to be involved and SB high-tech start-ups that are at the cutting edge of electronic commerce technology. The SBA response is to provide extensive education for the former SBs and to help develop a fair legal and regulatory environment for innovation that is not biased in favor of large firms for the latter SBs.

Sohodojo note: The SBA is partnering with credit card companies to increase the number of SBA small businesses that are certified to do credit card transactions and to provide more cost effective processing fees for SBA small firms. We need to pressure the SBA to include nanocorps in the set of "SBA small firms" eligible to take advantage of the proposed low cost processing fees for Internet-based commercial accounts.

posted 05-31-1999 12:05 PM               

The nanocorps rely on cash flow more than the average person. One unexpected medical or hospital bill can be absolutely devastating. In Die Broke Pollan and Levine make no bones about it, "going without coverage isn't even an option. . . Take the best coverage you can get." And, we ALL know that health insurance COSTS big time!

This extremely important bill amends the Internal Revenue Code to increase the deduction for health-insurance costs for self-employed individuals to 100% beginning on January 1, 1999. Currently the self-employed can only deduct 60% percent of these costs. The deduction is not scheduled to reach 100% until 2003, under current legislation signed into law in October 1998.

S.343 is designed to place self-employed individuals on an equal footing with large businesses, which can currently deduct 100% of the health-insurance costs for all of their employees.

S.343 also corrects a disparity under current law that bars a self-employed individual from deducting any of his or her health-insurance costs if the individual is eligible to participate in another health-insurance plan.

Currently, if an individual is eligible to participate in any other health insurance plan, regardless of how inadequate the coverage, either through a second job or a spouse-related plan, that individual cannot deduct his or her own self-employed health insurance costs. S.343 ends this disparity by clarifying that a self-employed person loses the deduction only if he or she actually participates in another health-insurance plan.

THIS IS A MOST IMPORTANT PIECE OF LEGISLATION!

S.343 affects us directly in the pocket. If you have not sent the sponsors a thank you e-mail, now is the time to do it. If you haven't let your Senators know how important this bill is to YOU, see the Get Involved topic and do it now.

Health Insurance rates are a huge bite out of the nanocorp budget. If this bill passes, it can mean hundreds of dollars in your pocket instead of Uncle Sam's starting with tax year 1999.

Legislative Status of S. 343
Self-Employed Health Insurance Fairness Act of 1999

REFERRED TO: Senate Committee on Finance
February 3, 1999 -- Read twice and referred to the Committee on Finance.

posted 07-05-1999 11:34 AM               

The House CoSB held a hearing on June 9, 1999, to explore the provisions of the Small Employer Tax Relief Act of 1999 (SETRA) introduced by CoSB Chairman Talent.

SETRA would increase the health insurance deduction for the self-employed to 100 percent immediately. Currently the self-employed can deduct only 60 percent of health insurance costs while large corporations can already deduct 100%.

SETRA provides for the graduated increase of the meal expense deduction for small businesses, which is currently 50 percent. The bill would gradually implement a meal and entertainment expense deduction of 80 percent by 2008.

SETRA proposes to increase small business expensing. Current law allows taxpayers to expense up to $19,000 of the cost of certain tangible, depreciable, personal property purchased for use in active conduct of a trade or business, and provides for a gradual increase of that limit to $25,000 by 2003. SETRA increases expensing to $35,000, immediately.

SETRA would also reduce payroll taxes by repealing the Federal Unemployment Payroll Surtax (FUDA).

SETRA would lower taxes on middle-class small business Americans, by reducing the top individual income tax rate from 39.4% to 34% on the active business income of small businesses.

For more information on this bill, call Ligia McWilliams of the Committee staff at (202) 225-5821.

HOW TO CONTACT THE HOUSE SMALL BUSINESS COMMITTEE http://www.house.gov/smbiz /
Email: smbiz@mail.house.gov
Phone: (202) 225-5821

posted 07-23-1999 12:48 AM               

COMMITTEE REAUTHORIZES SBIR

Since its inception in 1982, the SBIR program successfully has involved small businesses in the research and development programs of federal agencies.

H.R. 2392 reauthorizes the SBIR program for an additional seven years.

The SBIR program defines three phases for the purpose of funding projects.

• Phase I, a federal agency can award up to $100,000 to small businesses to determine the scientific merit and technical feasibility of ideas that have commercial appeal.


• Phase II, allows for awards up to $750,000 for product development.


• Phase III is a privately funded stage during which the finished product can be both federally procured and privately purchased.

For more information, contact Tee Rowe of the Committee staff at (202) 225- 5821 or visit the NIH SBIR site for application schedules and particulars.

posted 03-15-2000 12:45 PM               

The Small Business Tax Fairness Act would reduce death tax rates on smaller estates, (as much as 50 percent for many small firms); repeal a new installment sales tax law that threatens the retirement security of small business owners who sell their businesses on an installment base; provide IMMEDIATE 100 percent deductibility of the cost of health care for the self-employed; provide pension incentives; and raise expensing limits and business-meal deductions.