Category Archives: Tax

Entrepreneurs shine during National Small Business Week

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By Linda McMahon, SBA Administrator

Through awards ceremonies, media interviews and community events, we honor entrepreneurs whose achievements stand out. As an entrepreneur myself, I know the hard work that goes in to starting and building a small business – efforts that don’t often get the attention they deserve.

Honorees in this week’ spotlight do not cast a shadow that dims the efforts of others; rather they serve as a beacon – to competitors, up-and-comers and communities as a whole. They show what is possible. They are innovators and problem solvelinda-mcmahon-high.jpgrs, creating products and services that are better, smarter or more efficient than what came before. They are risk takers. And through their success, they inspire others to dream and to create small businesses of their own.

Small businesses contribute so much to our communities and economy. They create two out of every three net new jobs in the private sector. More than half of all Americans either work for or own a small business. Entrepreneurs are not only making a living for themselves, they are making their neighborhoods vibrant places to live and work and contributing to our nation’s economic strength.

The U.S. Small Business Administration is so proud to have been a part of small businesses’ success for 65 years. Since 1953, the SBA has been supporting entrepreneurs with the tools they need to succeed. The Agency – through its headquarters in Washington, DC; its 68 district offices nationwide; and resources partners like Small Business Development Centers, Women’s Business Centers, Veterans Business Opportunity Centers and SCORE chapters – serves entrepreneurs at every stage of their lifecycle. It guarantees loans for entrepreneurs who can’t get capital from other sources, mitigating a lender’s risk. It offers counseling on starting and scaling a business, from how to draft a business plan to how to export products overseas. It trains small businesses to compete for government contracts. And it helps those recovering from a declared disaster get back on their feet.

Whether they are starting up, expanding or getting through a tough time, the SBA is the nation’s only go-to resource for small business backed by the strength and resources of the federal government. It powers the American Dream. And the SBA is working to make that dream accessible to more Americans by modernizing its application processes, improving online resources, and streamlining how technology is used to deliver services more efficiently and effectively.

National Small Business Week honors entrepreneurs who have used these resources to make their lives and their communities better. And the SBA shines a light on their achievements, I hope it will illuminate the path for even more aspiring entrepreneurs following in their footsteps.

Linda McMahon serves as the 25th Administrator of the U.S. Small Business Administration. As a member of President Trump’s cabinet, she advocates on behalf of the 30 million small businesses in America, which employ nearly half of all American workers and account for 56.8 million jobs.

 

April Policy Watch #HillUpdate: The House Has Been Busy Tackling IRS Reforms, Financial Rules, the Next NDAA & More

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HSBC Chairman Chabot Urges Inclusion of Small Business Bills in FY19 NDAA

Last week before the House Committee on Armed Services, Chairman Steve Chabot of the House Small Business Committee urged members to incorporate a package of 13 bipartisan small business bills in the FY 2019 National Defense Authorization Act. The bills include legislation addressing SBA loan programs and technical assistance programs such as Women Business Centers, small business lending, cybersecurity, government contracting, and other issues impacting small business.

Read a full accounting of bills included in the package can be found here.

Watch Chairman Chabot’s testimony.

Legislation to Reform & Modernize the IRS Makes it Out of House Ways & Means

The House Ways and Means Committee last week approved the passage of the Taxpayer First Act (H.R. 5445), legislation sponsored by Oversight Subcommittee Chairman Lynn Jenkins (R-KS) and ranking member John Lewis (D-GA). The bill would improve the independent appeals process, taxpayer services and enforcement. It also updates the IRS and Tax Court structure.

Click here to learn more about the legislation and other recent bills relating to IRS reform passed out by the House Ways & Means Committee.

House Passes Bill to Ease Financial Regulations with Goal of Improving Lending

The House approved H.R. 4790, the Volcker Rule Regulatory Harmonization Act by a vote of 300-104. The legislation would exempt banks with total assets of $10 billion or less and comprised of 5% or less of trading assets and liabilities from the Volcker Rule. The rule prohibits banking agencies from engaging in proprietary trading or entering into certain relationships with hedge funds and private-equity funds. The bill would also grant exclusive rulemaking authority under the Volcker Rule to the Federal Reserve Board. The intent of the legislation is to alleviate the compliance burden on small banks, which would help improve capital markets and lending, especially to small business.

Read more

With Possible Trade War Looming, HSBC Holds hearing on the State of Trade for Small Business

The House Small Business Committee heard from a panel of business owners and experts on the state of international trade for small businesses. The hearing’s focus was the State Trade and Export Promotion (STEP) Grant Program and the federal government’s overall efforts to increase small business exports. However, with tariffs proposed by the administration and discussion of a possible trade war with China, witnesses highlighted how recent activity would impact their businesses and small business exporters at large.

Read submitted testimony or watch the full hearing here.

March Policy Update

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Policy Upate Graphic.pngSCOTUS Punts on DACA (For Now)

Last week, the Supreme Court sent the Trump Administration’s appeal on the President’s order to cancel DACA back to the 9th Circuit Court of Appeals, leaving the program’s March 5 expiration moot. Dreamers will remain protected from deportation until the Court of Appeals renders a decision, which could take months.

Breaking the Bank: WIPP Weighs in on Access to Capital

The Senate continues working through amendments to bipartisan lending legislation today that would lighten regulations imposed on small and mid-sized banks through Dodd-Frank. WIPP has advocated for ending the “one-size-fits-all” approach by calling on Congress to enact legislation to address the regulatory relief needed for smaller lending institutions, thus freeing up capital for small businesses.

Read the Economic Growth, Regulatory Relief, and Consumer Protection Act here. Read WIPP’s Breaking the Bank platform here.

WIPP Urges Expansion of Association Health Plans

In January, the Department of Labor issued a proposed rule that would expand participation in Association Health Plans for small businesses and the self-employed. WIPP urged the department to implement a program that maximizes the number of businesses that can participate in the plans, so that women business owners can provide more choices for affordable health insurance.

Read WIPP’s comments here.

NLRB Reverses Joint Employer Standard

Obama’s legal standard for determining whether joint employers could be held liable for an intertwined business’s workplace issues is back due to a conflict of interest of a board member who did not recuse himself from the case. NLRB granted the parties in the original case the ability to appeal and could rehear the case later this year.

Read the NLRB’s press release here.

Tax Withholding Guidance Released

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Taxes 2.jpegThe IRS recently released a notice providing the 2018 income tax withholding tables, showing the new rates for employees. The tables reflect changes made by the tax bill that was signed into law last month, including the increase in the standard deduction, repeal of personal exemptions, and changes in tax rates and brackets. They are designed to work with the Forms W-4 that employees have already filed with their employers.
The IRS is directing employers to implement the new withholding tables as soon as possible, but no later than February 15, 2018. This guidance is the first of several items that the agency plans to release this year in order to simplify the transition of the new rules.
For the IRS’s FAQ on the Tax Withholding Timetables, click here.

Government Shutdown Comes to an End

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capitol building.pngAfter a three-day shut down, Senate leaders reached an agreement to fund the government through February 8. The Senate voted 81-18 to pass the measure, shortly followed by the House, which passed it 266-150. The deal was based on a commitment by Senate Majority Leader Mitch McConnell (R-KY) to find a solution for Dreamers to remain in the U.S. until February 8. The agreement includes:

  • Authorizes the Small Business Administration to shift funding to administer increased 7(a) loan demand
  • Delays the re-implementation of the Obamacare medical device tax through 2019
  • Delays the re-implementation of the tax on “Cadillac” health plans through 2022
  • Suspends the Obamacare tax on insurance providers for 2019
  • A provision to provide back pay to workers who were briefly furloughed
  • A six-year extension of the Children’s Health Insurance Program (CHIP)

The continuing resolution (CR) includes other provisions which can be found here.

This is the fourth CR for FY18. As a reminder, a CR funds the government at current levels, in this case, FY17 levels. Having trouble keeping track of the CRs for FY18? See below.

CRs for FY18

  • September 30, 2017: First Deadline for FY18 – CR extended funding through December 8, 2017 (passed by Congress on September 8)
  • December 8, 2017: Second Deadline for FY18 – CR extended funding through December 22, 2017 (passed by Congress on December 7)
  • December 22, 2017: Third Deadline for FY18 – CR extended funding through January 19, 2018 (passed by Congress on December 21)
  • January 19, 2018: Fourth Deadline for FY18 – CR extended through February 8, 2018 (passed by Congress on January 22)
    • Note: The House passed a CR on January 18 to fund the government through February 16. After House passage, the Senate amended the CR by changing the expiration date from February 16 to February 8 and including the back-pay provision. The Senate then passed the amended bill yesterday afternoon, with the House following suit on January 22.  President Trump signed the bill into law that night.
Members Answer WIPP’s Call to Action!
On January 19, as the Senate was trying to find a way to keep the government open, we issued and Action Alert asking WIPP members to contact their senators about the shutdown. We’re proud to report that the Action Alert resulted in nearly 50 letters sent to Senators urging them to keep the government operating and telling them that shutdowns are bad for women business owners.
Thank you for making your voice heard and watch for future opportunities to engage!

2018 will be a big year for WIPP. Please join us!

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January Letter From WIPP President Jane Campbell

Happy New Year!

Washington was hit by a deep freeze at the beginning of January, causing a bit of a slow start for Congress. But national politics has already resumed its’ torrid pace.

Jane Campbell photo

WIPP President Jane Campbell

Don’t worry, Women Impacting Public Policy, with cool heads and thoughtful deliberation, will continue to advance and advocate for meaningful public policy that has a positive impact on women business owners. 

We are off to a great start. This week, we held an informative and well-attended policy briefing to help our members understand the intricacies and impacts of new developments, like the tax law, in Washington. This will be a new monthly series where members can ask WIPP’s Chief Advocate Ann Sullivan and me questions about the rapidly shifting policy landscape.

On top of our policy work, we are planning a new series of ChallengeHER events across the country to deliver the information and connections women need to succeed in government contracting. We are also busy lining up an informative slate of GiveMe5 webinars to provide members with government contracting knowledge delivered by experts in the field. From taking the first steps into contracting to learning what to do once you’ve landed a big government contract, these webinars are an indispensable resource!

As you can see, WIPP is on track to accomplish many amazing things this year. But it’s your voice and membership that makes us powerful in Washington. And it’s more important than ever that women entrepreneurs make their voices heard. After all, if we are not at the table, we will only get the scraps.

WIPP is a nonpartisan organization that brings women from all walks of life and both sides of the aisle together to speak with one voice about what women in business need to succeed. Please consider joining us today.

Jane Campbell
WIPP President

2017: A Banner Year for WIPP & Women Business Owners

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WIPP was busy this year educating policymakers, women business owners, the media and the public about what women business owners need to succeed. From bringing women entrepreneurs directly to some of the most powerful lawmakers in the country, to meeting women entrepreneurs where they live and do business to educate them on how to bolster their businesses, WIPP was at the forefront of issues impacting women in business in 2017.

A sampling of our (many) accomplishments are highlighted below:

Educating Thousands of Women Business Owners Nationwide

  • WIPP held 12 ChallengeHER events in cities across the country, training more than 2,100 women on the best practices for success in federal contracting; including 5 match making events with federal agencies and primes.  WIPP has educated more than 10,000 attendees through its classes that range from those who are new to the process to those highly experienced. Learn more about ChallengeHER, and read about some of the success stories that have come out of the program.
  • WIPP produced 30 Give Me 5 training webinars increasing the free, on-line curriculum to approximately 120 downloadable recordings.  Reaching over 3,000 people this year, these training webinars were taught by industry specialist and federal contracting experts.
  • More than 200 women business owners joined WIPP and Chicago Treasurer Kurt Summers for a discussion on venture funding and women owned small business. The discussion explored how to encourage venture capital investment in women, the process of lending for SBICs, and how women business owners can approach venture capitalists.

Impacting Policy at the Highest Levels

  • The president signed the 2018 National Defense Authorization Act (NDAA) into law, which includes a provision directing the Small Business Administration to study small business participation on Multiple Award Contracts. The SBA study is in response to a WIPP report revealing that women small business owners are being shut out of large government contracts. Learn more about WIPP’s study.
  • WIPP surveyed 515 WIPP-affiliated women business owners nationwide on how they use the tax code and worked with American University’s Kogod Tax Policy Center to use the survey data to research how the tax code impacts women business owners. The survey data – together with Kogod’s review of existing tax research on the topic – suggests that many women-owned companies are unable to fully access more than $255 billion worth of tax incentives Congress has designed to help small businesses. The study was picked up exclusively by the Associated Press and was featured in hundreds of papers across the country. Learn more about the report in an op-ed WIPP President Jane Campbell authored in Entrepreneur magazine.
  • WIPP brought women business owners to Washington to testify at tax hearings and help inform the framework for the House Small Business agenda.
  • WIPP’s Economic Blueprint, which outlines a range of economic policy recommendations lawmakers can follow to help women entrepreneurs thrive, was featured in Forbes. Read WIPP President Jane Campbell’s op-ed outlining WIPP’s Economic Blueprint in The Hill.
  • WIPP secured powerful politicians to speak at WIPP’s annual conference so they could hear directly from women business owners on what they want out of Washington. Lawmakers included House Ways and Means Chairman Kevin Brady (R-TX), Sen. Joni Ernst (R-IA), House and Senate small business committee tax experts and Senate Small Business Committee leadership.
  • WIPP’s advocacy efforts throughout the tax reform debate—which included submitting comments to the Senate Finance Committee urging parity for pass through entities and repeal of the estate and AMT taxes—were instrumental in securing a pass-through carve out, along with the agreement to double the estate tax exemption from the current $5.6 million per individual to $11.2 million ($22 million for couples). WIPP members authored op-eds, letters to the editor and did interviews with reporters on the issue to ensure the women-owned business perspective was breaking through.
  • WIPP’s advocacy team worked to maintain funding for programs important to WIPP, such as the Women’s Business Centers, microloan lending programs and more.
  • WIPP submitted testimony to Congress and statements to the media urging stability of the small business health insurance marketplaces and that Congress keep in place a pooling mechanism for small businesses to buy health insurance.
  • WIPP encouraged the Consumer Financial Protection Bureau to support the implementation of Section 1071 of the Dodd-Frank Act requiring financial institutions to gather and report data on small business lending, including applications made by women and minority owners. Read our press statement and our comments to the CFPB.
  • WIPP supported the Promoting Women in Entrepreneurship Act.
  • WIPP was mentioned in more than 60 news articles in 2017, ensuring the women business owner perspective was heard throughout national debates around tax reform, the federal budget, entrepreneurship and more. We had articles in Forbes, Entrepreneur Magazine, Financial Times, The Hill newspaper, The Atlantic, the Business Journals, Reuters, the Associated Press, Morning Consult, Bloomberg, the Chicago Tribune, NBC and many more.

Supporting Small Businesses on Small Business Saturday

  • 2017 saw record support from business organizations through the Small Business Saturday Coalition, the national grassroots initiative that WIPP leads to promote Small Business Saturday, with more than 575 organizations nationwide supporting small businesses on Small Business Saturday—an 18% increase over previous years.
  • Organizations WIPP engaged to support Small Business Saturday included the National Retail Federation, Association of Women’s Business Centers, U.S. Black Chambers, Inc., and SCORE, as did local organizations such as the Chicago Public Library, San Francisco Chamber of Commerce, Main Street Iowa and many, many others.
  • WIPP’s leadership around the Small Business Saturday Coalition was instrumental in promoting 7,200 events and activities celebrating Small Business Saturday nationwide, engaging more than 2.2 million small businesses.
  • The Coalition secured 653 mayoral proclamations in support of Small Business Saturday nationwide and ensure numerous public service announcements were issued promoting the day.
  • WIPP secured passage of a Senate Resolution designating Small Business Saturday and introduction of House Resolution and engaged 240 Members of Congress in Small Business Saturday activities.

WIPP In the News: December 2017

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WIPP officials, members and activities drew media attention on issues ranging from tax reform to Small Business Saturday. Check out the 10 media hits featuring WIPP over the last month.

The Hill: Tax Bill Isn’t Perfect But a step in the Right Direction

Forbes: Female Business Owner Feeling Set-Aside? Consider This Option

Epoch Times: Republicans Forge Ahead with Tax Reform

Fosters Daily Democrat: Small Business Saturday posts impressive numbers

Niagara Frontier: Reports: Estimated 43% of American adults shopped or dined small on Small Business Saturday

Survey: Small Business Saturday Inspires Consumers to Shop Local

The Journal News: Port Chester to make Nov. 25 Small Business Day

Market Business Insider: Nine-in-Ten U.S. Consumers Say Small Business Saturday Has Had a Positive Impact on Their Community

The Eagle: Tax reform would boost women-owned businesses

Vision Times Media: Helping women entrepreneurs get federal contracts

Tax Plan Steams Ahead

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House Ways and Means Chairman Kevin Brady of Texas discusses tax reform during WIPP’s 2017 annual meeting.

Last week, the Senate passed tax reform (H.R. 1), setting up a conference to produce a united bill with the House. Versions passed by the Senate and the House contain significant differences which must be resolved before final passage.

Proposed business tax changes are listed below, highlighting the differences in the House and Senate version.

  • Individual Tax Rates
    • House: Four Brackets—12%, 25%, 35% and 39.6%—allows an additional rate for higher income earners
    • Senate: Seven Bracket—10%, 12%, 22%, 24%, 32%, 35%, and 38.5%
  • Pass-Through Treatment
    • House: tax rate for qualified business income 25%. Only 30% of business income is eligible for this rate. Personal services companies are not eligible for this rate.
    • Senate: Deduction allows for 23% of qualifying business income, up to $250,000 for single filers or $500,000 for joint filers (expires after 2025)
  • Corporate Tax Rate
    • House: Permanent reduction to 20% (effective 2018)
    • Senate: Permanent reduction to 20% (effective 2019)
  • State and Local Taxes (SALT)
    • House: Preserves property tax deduction of as much as $10,000
    • Senate: Preserves property deduction up to $10,000 (expires after 2025)
  • Estate Tax
    • House: Doubles the exemption to $11 million for single tax payers and $22 million for married tax payers (repeals in 2025)
    • Senate: Doubles the exemption to $11 million for single tax payers and $22 million for married tax payers through 2025 (no repeal)
  • Alternative Minimum Tax (AMT)
    • House: Repeals the AMT for individual and corporate filers
    • Senate: Retains the AMT for individual and corporate filers and raises the individual threshold
  • Healthcare Mandate
    • House: Maintains the individual mandate requiring the purchase of health insurance
    • Senate: Repeals the individual mandate requiring the purchase of health insurance

A Senate and House conference has met to come up with a single bill to send to the president. Republican leaders in the Congress hope to vote on the conference version next week.

 

October Policy Watch: Taxes, Budget & More

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WIPP Government Affairs

GOP Releases Tax Reform Proposal: What’s in it for you?

Congress has finally taken the long-awaited steps toward implementing tax reform. GOP leaders released their framework for tax reform in a proposal entitled, “Unified Framework for Fixing Our Broken Tax Code.” Provisions pertinent for small business in the plan include:

  • Limits the maximum rate applied to pass-through entities to 25% (currently 39.6%)
  • Reduces the corporate rate to 20% (currently 35%)
  • Consolidates the seven individual tax brackets to three: 12%, 25%, and 35%
  • Allows room for Congress to add a fourth bracket for high income earners
  • Repeals the Estate Tax
  • Repeals the Alternative Minimum Tax (AMT)
  • Eliminates taxes on the first $24,000 of income earned by a married couple and the first $12,000 of income earned by a single individual (currently $12,700 for married filers and $6,350 for single filers)
  • Eliminates the standard deduction and personal exemption for filers
  • Allows businesses to expense the cost of new investments in depreciable assets for five years
  • Partially limits the deduction for net interest expense incurred by C corporations
  • Eliminates some itemized deductions (but does not specify which provisions)
  • Eliminates § 199 manufacturing deduction
  • Retains tax benefits for retirement security (401K, IRA)
  • Implements territorial tax system

House Ways and Means Committee Chair Kevin Brady (R-TX) attended the WIPP Annual Leadership Meeting Luncheon to talk about the plan and to answer questions from members.

Finalizing the Budget: Why Does It Matter?

If both the House and the Senate do not pass an FY2018 Budget, the GOP tax reform framework cannot pass in its current form. Congress hopes to pass tax reform though reconciliation, a process that allows the Senate to pass budget-related legislation with a simple 51 majority vote, instead of the 60 votes typically required. The GOP has a 52-48 majority in the Senate. If the budget resolutions do not pass, the tax reform package negotiated by the Administration and GOP Congressional leaders would require at least eight Democratic votes.

Last week, the House passed their FY2018 Budget Resolution, H. Con. Res. 71, which contains reconciliation language that directs the House Ways and Means Committee to begin drafting tax reform legislation. The House resolution provides $300 billion over 10 years to pay for tax reform. The Senate Budget Committee also passed their FY2018 Budget Resolution.  The Senate resolution contains reconciliation language that provides the Senate Finance Committee with $1.5 trillion over 10 years for tax reform.

The bill will be taken up by the Senate when they return from recess next week.

SBA Issues Notice of WOSB NAICS Changes

SBA is responsible for implementing and administering the Woman-Owned Small Business (WOSB) Program. The WOSB Program authorizes federal contracting officers to restrict competition for an acquisition to WOSBs, provided that appropriate conditions are met. In order to identify the industries eligible for set-asides under the WOSB Program, the SBA administrator has to conduct a study every five years to identify which industries WOSBs are underrepresented in in the Federal marketplace. As a result of the 2014 study findings, SBA increased the number of NAICS codes authorized for use under the WOSB Program to 113 four-digit NAICS industry groups, effective March 3, 2016. Consequently, WOSBs have been able to compete for and receive contract awards in 92 four-digit NAICS industry groups or 365 six-digit NAICS codes. EDWOSBs have been able to compete for and receive contract awards in 21 designated four-digit NAICS industry groups or 80 six-digit NAICS codes, in addition to those authorized for WOSBs.

On August 8, 2016, OMB published its most recent update to the NAICS industry groups, NAICS 2017, “Notice of NAICS 2017 final decisions.” These went into effect on January 1, 2017. In order to align the WOSB Program with the Notice of NAICS 2017 final decisions and SBA’s adoption of NAICS 2017 for its size standards, SBA is issuing this notice to amend the NAICS codes eligible for use under the WOSB Program.

Changes to WOSB NAICS

  1. 2012 NAICS codes 333911 and 333913 à 2017 NAICS code 333914 [Due to merges from the four digit codes]
  • 333911: Pump and Pumping Equipment Manufacturing à 333914 Measuring, Dispensing, and Other Pumping Equipment Manufacturing
    • Measuring and Dispensing Pump à Measuring, Dispensing, and Other
  • 333913: Manufacturing à 333914 Pumping Equipment Manufacturing
  1. 2012 NAICS codes 512210 and 512220 à 2017 NAICS code 512250 [Merged Industries]
  • 512210 Record Production à 512250 Record Production and Distribution
  • 512220 Integrated Record Production/Distribution à 512250 Record Production and Distribution
  1. 2012 NAICS code 517110 à 2017 NAICS code 517311
  • 517110 Wired Telecommunications Carriers à 517311 Wired Telecommunications Carriers
  1. 2012 NAICS code 517210 à 2017 NAICS code 517312 [Changed without changing definitions or titles]
  • 517210 Wired Telecommunications Carriers (Except Satellite) à 517312 Wired Telecommunications Carriers (Except Satellite)
  1. 2012 NAICS code 541711 will correspond to 2017 NAICS codes 541713 and 541714 [New industries were created by splitting two industries into two parts with one part of each industry defined as a separate industry and combining other parts of the two industries to form a separate new industry]
  • 541711 Research and Development in Biotechnology will correspond to 541713 Research and Development in Nanotechnology and 541714 Research and Development in Biotechnology (except Nanotechnology)
  1. 2012 NAICS code 541712 will correspond to 2017 NAICS codes 541713 and 541715
  • Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology) will correspond to 541713 Research and Development in Nanotechnology and 541715 Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)