House Committee Talks Taxes For Small Businesses

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BY: Jake Clabaugh, WIPP Government Relations

tax

If, like most small business owners, you have concerns about year-end tax planning, Congress may have a Holiday present for your business’ bottom line.

 

An agreement to reauthorize tax rules, known as “extenders,” could come before Congress adjourns for their Holiday recess. Extenders are temporary tax rules and require Congress to authorize their renewal. Extension of these provisions, although temporary, could save your business from significant tax liability.

 

For small businesses, these changes can have a tremendous impact. The House Small Business Committee held a hearing, “Employers of Choice: How the Tax Extender Debate Will Affect Small Business” on December 3 to discuss how the year-to-year renewal process impacts small firms. The hearing allowed members of the small business community to explain the importance of these tax rules and how uncertainty can negatively affect investments by small businesses.

 

Did your small business invest in any equipment this year? Then one tax extender that is important for your business is often referred to by its place in the tax code, Section 179, or simply as “Small Business Expensing.” This rule allows businesses to deduct the full cost of equipment purchased during the tax year, subject to certain conditions, instead of writing off portions of the purchased equipment over several years. If this provision is not extended, small businesses that made significant investments in equipment could face higher tax liability.

 

Last year, Congress agreed to reauthorize certain tax extenders for the 2014 tax year. For the 2015 tax year, negotiators in the House and Senate are still determining what tax rules to extend and for how long. A similar bargain is expected this year, but it is still unclear what provisions will be included.

 

For more information, please see WIPP’s advocacy efforts on the Economy and Tax.

So Close and Yet So FAR

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Despite its official passage into law and SBA’s implementation, some contracting officers in federal agencies are waiting for the addition of official language to the Federal Acquisition Regulation (FAR) to use the new sole source authority in the women’s procurement program. We have seen first hand that regardless of SBA’s assurances that the law is ready to use, some agencies are reticent to use the new authority until the FAR has officially adopted the change in law. The Federal Acquisition Regulatory Council has already drafted the rule, which is currently in a review phase. And so we wait.

 

sole sourceOn October 14th, after many years of advocacy spearheaded by WIPP, sole-source authority for Women Owned Small Businesses (WOSB) officially went into effect.  The Small Business Administration (SBA) fast-tracked its official rule authorizing WOSB sole-source, allowing Contracting Officers to cite the rule and award sole source contracts. SBA encouraged agencies to use the new law upon release—before the October 14 date.  

 

How can women business owners speed the process and become an early pioneer in sole source contracts? Sharing key information with federal agencies is important. Small business offices as well as the contracting community need education on the program.  Since this is the newest small business contracting program on the books, many acquisition officials are still getting used to it.  The sole source piece, although mirroring the HUBZone program, is brand new and worthy of explanation.

 

Resources from WIPP such as the criteria for a WOSB sole source article, SBA’s final rule on sole source, and any future rulings by federal agencies reinforcing sole source awards for WOSBs, can help Contracting Officers support a sole source justification. ChallengeHER events now being held around the country are an excellent venue for learning about the WOSB program and recent changes.  

 

And, it is important to dispel the myth that sole source justifications can only be used if your company is the only company in the universe that has a particular product or performs a specific service. Take a look at other sole source justifications found at FBO.gov. You will find that reasons such as close proximity to the buyer, employing the most highly skilled staff, and the ability to customize a product have all served as justifications for sole-source awards in other programs.
We are so close but every day that the FAR Council fails to act, some woman owned company stands to lose what could have been a contract award.  WIPP, through its advocacy, will continue to do what it takes to get this final piece in place.  

WIPP Testifies to Congress on Challenges Facing Small Contractors

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Anne Crossman

The House Small Business Committee hearing last week focused on one of WIPP’s key priorities: ongoing issues affecting small companies trying to do work with the federal government. Anne Crossman, a member of WIPP’s Leadership Advisory Council, used her expertise in subcontracting to testify before the Committee regarding the challenges faced by small subcontractors.

 

In particular, many WIPP members have questioned to what extent subcontracting plans are enforced. WIPP has long advocated for a policy of “if you list us, use us” and it is still unclear if prime contractors are being held to these plans.

 

Subcontracting is a staple of many small contractors and facilitates the flow of federal contract dollars into small businesses, which provide jobs and boosts local economies. Agencies have subcontracting goals to ensure that small firms get a fair shot at contracting dollars.

 

The Committee delved into these and many other challenges facing small subcontractors. The hearing can be found in full here.

Revising the Veterans Certification – Top to Bottom

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WomenVeteransAccording to the Small Business Administration (SBA) veterans own nearly 10% of all small businesses and those veteran-owned businesses generate more than $1 trillion dollars in revenue each year. In order to qualify for federal contracting preferences at the Veterans Administration (VA), these businesses have to certify as a veteran owned business. The Veterans Administration calls this program “Veterans First.” Government-wide contracting programs give preferences to service disabled veteran owned businesses (SDVOBs) which are required to go through the certification process at the VA.

The Veterans Administration is asking for comments on a new set of changes for the Veteran Owned Small Business program (VOSB). Among many other changes, the proposal would alter the definition of a veteran, a caregiver, the verification requirements for a VOSB, and requirements for joint ventures.

First, the definition of “veteran” in the program is now consistent with a recent update to the VA’s overall definition of veteran. This means owners who served in the National Guard or in the Reserves are still only eligible to be an owner of VOSB or SDVOSB if they received a service-connected disability. The single definition of “veteran” is intended to create consistency when applying to all programs within the VA.

Veteran owners would be required to oversee “daily business operations,” replacing the terms “daily business management” and “day to day operations” in an effort to simplify the application process. In addition, references to spouses and personal caretakers are removed, replaced by “permanent caretaker” to more clearly define a single role aiding the service-disabled owner. A letter outlining the service-disabled veteran’s disability and the need for the permanent caregiver must be included in order to qualify. The VOSB application process, which was required annually, would be expanded to last for two years if the proposed rule was adopted.

Last, language on VSOB joint ventures has been clarified, requiring at least one joint partner be a verified VOSB. Additionally, the same project and time restrictions that apply to other set-aside programs have been added. All these changes, and more, can be viewed and commented on here.

If you have an opinion on the VA certification, now is the time to submit them. Your comments will make a difference – agencies receive every submission and carefully review them.

Regulation or Innovation? Congress Will Weigh In On FCC Regs That Can Impact Advances In Technology And Wireless Access

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19109887010_40b0dfa987_mOn November 17th, all five FCC commissioners are scheduled to appear at a Congressional hearing during which they will discuss the Commission’s work including the upcoming incentive auction and the open Internet order passed earlier this year.  This hearing is a very important opportunity for Congress to ensure the FCC’s recent actions on these issues serve the interests of the American people and our economy.

The economic landscape has changed drastically over the past few decades.  Advances in technology and broadband are changing consumer demand, and businesses and entrepreneurs must evolve in order to compete and thrive in today’s marketplace.  However, current FCC regulations are failing to keep up with these changes, and as a result are interfering with competitive industries’ efforts to innovate and grow.

For business owners, access to high-speed broadband enables increased efficiency of business operations, improved customer service, reduced cost, and the ability to reach new customers and markets.  Entrepreneurs also gain the flexibility to start and grow their businesses, whether they are working from an office, their home, or on the move.

The benefits of today’s broadband technology exist because of the hands-off regulatory approach the government applied to the Internet over twenty years ago.  This framework has a proven record of increasing private investment in new networks, enabling innovation to thrive, and expanding access to the highest quality broadband services to more consumers and businesses.

Unfortunately, the FCC could hurt this track record of success by changing course and adopting old regulations that were meant for the old telephone monopoly.  By saddling the Internet with price regulation micromanagement, among other things, the FCC is discouraging companies from building out their broadband infrastructures.  Similar policies have failed in Canada and the European Union.

The FCC’s regulatory overreach is a high-risk gamble. It puts consumers and businesses in harm’s way, risking the choice and lower costs we have experienced and benefitted from in the modern, broadband-connected world. Instead, we need to maintain the long-held, light touch policy. This approach will generate even more innovation and investment in our broadband infrastructure, crucial for business owners throughout the country.

Congress needs to hold the FCC to a high standard this Tuesday and ensure its actions help foster an innovative and competitive business environment.  This is the only way wants to provide consumers and business owners with access to the high-quality, affordable broadband services they need, while helping to grow our overall economy.

SEC Finalizes Equity Crowdfunding Rules Opening the Door to Additional Capital for Small Businesses

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crowdfundingCrowdfunding is not new to businesses.  You have likely seen or participated in campaigns to help companies bring their idea to market or to grow their business.  In return for a small investment, you receive a product, gift or service in exchange.  This is known as rewards-based crowdfunding, which began to become a viable avenue for raising funds for businesses in 2009 with the launch of a number of crowdfunding platforms like Kickstarter and Indiegogo.

With new rules from the SEC, crowdfunding is now getting an upgrade.  Equity crowdfunding allows a business to seek capital from a diverse group of investors through a “funding portal” and provides investors with an equity stake or stock in the business. Crowdfunding transactions are exempt from the complex and expensive securities registration process. These transactions could be a simpler equity financing option for small businesses; however, the total costs that small firms will incur from a crowdfunding offering are still unclear.

The Securities and Exchange Commission (SEC), who oversees the process, issued a long-awaited final rule on equity crowdfunding that will be effective January 29, 2016.  Highlights of the new requirement include:

  • Small businesses can raise up to $1 million in a twelve-month period and must disclose:
    • Financial statements
    • How the proceeds from the offering will be used
    • Corporate officers and directors
  • Limits the amount an investor can spend to:
    • Greater of $2,000 or 5% of their annual income or net worth (whichever is less) if both are below $100,000
    • 10% of their annual income or net worth (whichever is less) if both are equal to or more than $100,000
    • A total of $100,000 aggregate investments during a 12-month period
  • Requires funding portals to register with the Financial Industry Regulatory authority (FINRA) and:
    • Provide educational materials on how the funding portal operates
    • Disclose how the portal is compensated
    • Provide disclosures from the offering business

WIPP has been a strong advocate for finalized crowdfunding rules, having included the priority in the recently issued Access to Capital Platform. The SEC’s rule will allow small businesses to raise capital through investment without triggering federal securities laws and registration requirements.

For more information, please see SEC Chair Mary Jo White’s statement on Crowdfunding regulation.

Additional resources:

Last Chance! Vote for WIPP Leaders in the 2015 Small Business Influencer Awards

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Vote-120x240-aWe are proud to announce that Barbara Kasoff (WIPP President Emeritus),  Ann Sullivan (WIPP’s Chief Advocate) and Dr. Sharon Hadary (WIPP Leadership Advisory Council Member) have been nominated for the 2015 Small Business Influencer Awards in the category of Leaders.

The Small Business Influencer Awards honor those who are influential to small businesses in North America, through the products, services, knowledge, information, or support they provide to the small business market.  The Awards are designed to recognize the unsung heroes of small businesses – those who support and encourage entrepreneurs and small business owners, and help them achieve success and stay successful.

Please cast your vote by November 5, 2015 in support for one of these fantastic WIPP leaders:

The Awards can be found on the Web at: http://influencers.smallbiztrends.com/

Don’t forget to vote!

Open Enrollment for 2016 Health Insurance Marketplace Begins

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It’s time to get covered!  HCgov stock imageryMillions of Americans count on HealthCare.gov for quality and affordable health coverage. If you or someone you care about needs health insurance, you should know that Open Enrollment for 2016 coverage runs from November 1, 2015 through January 31, 2016.

Learn about options available in your area by visiting HealthCare.gov or call 1-800-318-2596.

Key Dates and Deadlines

  • November 1, 2015: Open Enrollment for 2016 Marketplace coverage begins.
  • December 15, 2015: Deadline to enroll for coverage starting January 1, 2016.
  • January 15, 2016: Deadline to enroll for coverage starting February 1, 2016.
  • January 31, 2016: Last day of Open Enrollment for 2016 Marketplace coverage.

Helpful Resources for Business Owners & the Self-Employed

3 Ways Employee Policies Can Protect Your Business

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K Prinz

By Kristen Prinz, Founder and Managing Partner of The Prinz Law Firm

A study by specialty insurer Hiscox was recently published finding that U.S.-based companies have at least an 11.7 percent chance of facing an employment law charge. The study claims that the average cost for small and mid-sized businesses to defend these claims is $125,000. That’s a lot of money. It makes having effective employee policies all the more important.

On November 16, 2015, at 1:00 pm CST, I will be presenting the webinar 10 Employee Policies that Minimize Business Risk for WIPP and the WBDC. Participants will learn about 10 policies that can help businesses avoid the $125,000 average. Here are three ways that these polices can help protect your business:

  1. Address claims before they become lawsuits.

Employee policies can provide employees with an internal method to resolve a potential claim. Businesses can use policies to encourage and require that concerns about discrimination, harassment or even wage issues be reported. Knowing the concerns of your employees puts an organization in a much better position to swiftly resolve an issue that could otherwise become a lawsuit.

  1. Show the government your business is committed to compliance.

Having anti-discrimination and anti-retaliation policies shows the EEOC that your business has taken a stance against discrimination and retaliation. Similarly, an effective time keeping policy can show the DOL that your business is taking appropriate steps to comply with wage laws. These policies can bolster a defense when an agency audits your business or investigates a claim.

  1. Create a positive workplace culture.

Your business shouldn’t just have policies; it should abide by them and enforce them. Having well publicized policies that demonstrate your business’s dedication to a positive workplace is one of the best ways to deter employment law claims. Employees are far less likely to sue an employer they believe supports and values them.

To learn about the 10 policies that can help your business (i) address claims before they become lawsuits, (ii) show the government your business is committed to compliance, and (iii) create a positive workplace culture, register now for the WIPP and WBDC webinar 10 Employee Policies that Minimize Business Risk.