FOR IMMEDIATE RELEASE
December 16, 2009
Small Business and Small Industry Association Members Testify Against New Tax on Small Businesses
Concord, NH - The Small Business and Small Industry Association (SBSIA) testified today at the Department of Revenue Administration public hearing in opposition to the proposed rules for the new 5% tax on LLCs.
“Small businesses are the economic engine of our economy. It makes no sense to slap a 5% tax on these very businesses that we are depending on to create jobs. We need to create a business environment that helps these businesses grow, not threaten their very survival," said former Senator Bob Clegg and Chairman of the Board of Directors of the Small Business and Small Industry Association.
“In my more than 30 years at the NH Department of Revenue Administration, including my time as Commissioner, I have never seen such a drastic change to our tax system as this new LLC tax that was passed without any public input. In my experience, I never saw a single tax issue that didn’t change or benefit in some way as a direct result of public input during the legislative process. The actions of the Legislature during the 2009 budget process sets a very dangerous precedent,” said Phil Blatsos, former Commissioner of the NH Department of Revenue Administration and member of the Board of Directors of SBSIA.
The Small Business & Small Industry Association (SBSIA) is New Hampshire’s advocate for and the new voice of New Hampshire’s small businesses. Through coalition building and direct contact with legislators and other small businesses throughout the legislative process, SBSIA works to ensure that the economic and regulatory climate in New Hampshire continues to enhance the ability for small businesses to prosper.
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Thursday, December 17, 2009
Tuesday, December 15, 2009
UL Reports that Business Owners Asking Governor to Ax the LLC Tax
Business owners to governor: Ax new tax
By TOM FAHEY
State House Bureau Chief
10 hours, 13 minutes ago
Representatives of the small business community called on Gov. John Lynch today to use his executive power to block a new tax they say will hurt the state economy.
The group opposes a proposed expansion of the state's 5 percent interest and dividends tax to include distributions by limited liability corporations (LLCs).
Speakers said the new tax will hurt job growth and investment, and called on tax haters to file comments on their Web site, www.stopthellctax.com.
The tax change, expected to produce $30 million, passed at the last minute as part of budget negotiations in June. It will apply to all distributions made since Jan. 1, 2009.
The Department of Revenue Administration plans a public hearing tomorrow on the rules it will use to collect the tax.
Lynch press secretary Colin Manning said the governor thinks the tax change makes the state's tax code fairer.
"It's important that we close this loophole and that we apply fairness in the way we treat all business," he said. "It's not fair to have a business that is set up as a corporation pay one set of taxes, and another business set up as an LLC play by a different set of rules."
Andy Sanborn of Concord, an unsuccessful 2008 state Senate candidate, said the tax change "isn't closing a loophole; it's squeezing the remaining blood from the stone."
Sanborn, owner of the Draft Restaurant and sports bar, said: "This isn't a Republican or Democratic issue, or an Independent or Libertarian issue. It's about every person and business in this state."
Lobbyist and former state Sen. Bob Clegg said reaction to the tax is only building now because the DRA took so long to write the rules, and most small business owners didn't know about the tax change.
Clegg said the $30 million that the state collects through the tax is $30 million that won't be available for investment in new jobs and production.
A number of business people and Republican leaders have called on Lynch to expand to five the number of hearings on the DRA rules. One session is not enough to answer all questions, they said.
By TOM FAHEY
State House Bureau Chief
10 hours, 13 minutes ago
Representatives of the small business community called on Gov. John Lynch today to use his executive power to block a new tax they say will hurt the state economy.
The group opposes a proposed expansion of the state's 5 percent interest and dividends tax to include distributions by limited liability corporations (LLCs).
Speakers said the new tax will hurt job growth and investment, and called on tax haters to file comments on their Web site, www.stopthellctax.com.
The tax change, expected to produce $30 million, passed at the last minute as part of budget negotiations in June. It will apply to all distributions made since Jan. 1, 2009.
The Department of Revenue Administration plans a public hearing tomorrow on the rules it will use to collect the tax.
Lynch press secretary Colin Manning said the governor thinks the tax change makes the state's tax code fairer.
"It's important that we close this loophole and that we apply fairness in the way we treat all business," he said. "It's not fair to have a business that is set up as a corporation pay one set of taxes, and another business set up as an LLC play by a different set of rules."
Andy Sanborn of Concord, an unsuccessful 2008 state Senate candidate, said the tax change "isn't closing a loophole; it's squeezing the remaining blood from the stone."
Sanborn, owner of the Draft Restaurant and sports bar, said: "This isn't a Republican or Democratic issue, or an Independent or Libertarian issue. It's about every person and business in this state."
Lobbyist and former state Sen. Bob Clegg said reaction to the tax is only building now because the DRA took so long to write the rules, and most small business owners didn't know about the tax change.
Clegg said the $30 million that the state collects through the tax is $30 million that won't be available for investment in new jobs and production.
A number of business people and Republican leaders have called on Lynch to expand to five the number of hearings on the DRA rules. One session is not enough to answer all questions, they said.
The LLC Tax in Today's Portsmouth Herald
Businesses fight new tax
December 15, 2009 2:00 AM
CONCORD — Legislators and small-business owners will testify against the state's new tax on limited liability companies at a public hearing Wednesday.
In describing the LLC tax as a "13.5 percent income tax" on small business owners, Senate Minority Leader Peter Bragdon said, "We stand with our state's small business owners in opposition to this new income tax and urge them to join us at Wednesday's hearing."
Republican state Sen. Jeb Bradley and Republican Rep. David Hess are expected to attend along with several business groups such as the N.H. Lodging & Restaurant Association and Small Business Small Industry Association of N.H.
The 10 a.m. hearing is at the Department of Revenue Administration, at 109 Pleasant St.
December 15, 2009 2:00 AM
CONCORD — Legislators and small-business owners will testify against the state's new tax on limited liability companies at a public hearing Wednesday.
In describing the LLC tax as a "13.5 percent income tax" on small business owners, Senate Minority Leader Peter Bragdon said, "We stand with our state's small business owners in opposition to this new income tax and urge them to join us at Wednesday's hearing."
Republican state Sen. Jeb Bradley and Republican Rep. David Hess are expected to attend along with several business groups such as the N.H. Lodging & Restaurant Association and Small Business Small Industry Association of N.H.
The 10 a.m. hearing is at the Department of Revenue Administration, at 109 Pleasant St.
Monday, December 14, 2009
Make Your Voice Heard!
In the 2009 Legislative session the NH Department of Revenue Administration slapped LLC's with a NEW 5% tax on interest and dividend disbursements, in other words an income tax on small business owners.
The House and Senate passed this proposal without a single public hearing or any dissent by any other business organization.
Wednesday, December 16th at 10:00am there will be a public hearing on the LLC tax held by the DRA. This is the first public hearing and the first opportunity for small business owners to speak out against this tax which will greatly hurt small businesses in our state.
We encourage all business owners to try and attend this hearing and make your voice heard.
Wednesday, December 16th
10:00 am
DRA Training Room
109 Pleasant Street, Concord NH.
The House and Senate passed this proposal without a single public hearing or any dissent by any other business organization.
Wednesday, December 16th at 10:00am there will be a public hearing on the LLC tax held by the DRA. This is the first public hearing and the first opportunity for small business owners to speak out against this tax which will greatly hurt small businesses in our state.
We encourage all business owners to try and attend this hearing and make your voice heard.
Wednesday, December 16th
10:00 am
DRA Training Room
109 Pleasant Street, Concord NH.
SBSIA in the Press
New organization for small business finds opposition
By SHIRA SCHOENBERG Concord Monitor
The painter and the local pizza parlor have a new voice in the Legislature. But do they need one?
Former Republican state Sen. Bob Clegg, of Hudson, a lobbyist for the company Legislative Solutions, recently founded the Small Business and Small Industry Association.
“It’s designed to have a voice in Concord for all the small businesses that now don’t seem to have anyone to speak for them,” Clegg said.
But business advocates say Clegg’s organization is trying to fill a nonexistent need.
“The small-business community is very effectively represented by the Business and Industry Association, local chambers of commerce, trade associations around state,” said Business and Industry Association President Jim Roche.
Clegg said the Small Business and Small Industry Association is not meant to compete with the Business and Industry Association, because they serve different types of businesses.
“You can’t represent Liberty Mutual and Bob’s Painting Contractors, because their interests are not the same,” Clegg said.
Clegg said he hopes to work with the larger group on “issues of mutual interest.” At the same time, he said, his group will focus specifically on smaller businesses – the local corner store, contractor and house cleaner.
“When there’s a voice in legislation (saying) let’s tax the little guy, we’ll be there,” Clegg said.
The Small Business and Small Industry Association’s first campaign will be to repeal the new 5 percent tax on limited liability companies and partnerships, Clegg said. The state revenue commissioner told legislators when the tax was under discussion that an LLC tax would close a loophole that allowed LLCs to pay a lower tax rate, since LLCs are exempt from a 5 percent interest and dividends tax.
Clegg said it is unfair for small businesses to be taxed for the business profits tax and then be taxed another 5 percent on any money the business partners make off their work. Large corporations, he said, don’t face the same tax.
“It stifles growth, and it’s wrong for big business to say it’s OK to do this to the little guy,” Clegg said. “How about they tax Jim Roche’s wage? He’s not paying 5 percent income tax, why should I (as the small businessman)?”
The new association will be a nonprofit with a board of directors. Among the directors so far are several small-business owners and Phillip Blatsos, former commissioner of the state Department of Revenue Administration.
Roche disagrees with Clegg that the interests of small and large businesses are different.
“I think 99 percent of the time, the concerns of the small business, midsize company and large company are the same,” Roche said.
Roche said the Business and Industry Association never supported the LLC tax. Since it passed, he said, the organization has been trying to understand it and ensure that it is fair and takes business hardships into account.
“If we can’t have all our questions answered … it’s possible we’d seek repeal of the provision when the session starts in January,” Roche said.
Roche said Clegg was “clearly trying to trade on name and good reputation of the BIA” while ignoring the work done by the association and local chambers of commerce.
“To report that the small-business community is not being represented effectively or at all is way off base,” Roche said. “He’s simply wrong on the facts.”
The Business and Industry Association represents large and small businesses. Concord-based members include groups as diverse as the state Department of Health and Human Services, the New Hampshire National Guard and Grappone Automotive Group. Businesses pay for their membership depending on the size of their New Hampshire payroll, so membership fees can range from $260 to $18,000, according to the association.
Tim Sink, president of the Greater Concord Chamber of Commerce, had a mixed view of the new organization.
“I think to the extent that we can increase small businesses’ voice in front of the state Legislature that’s a good thing.” Sink said. “I’m a little concerned that creating new organizations at this point might be somewhat redundant.”
Sink said that in addition to the work of the Business and Industry Association, local chambers of commerce have government affairs programs and work with retail merchants associations.
“I always get a little concerned when we create more organizations that you can divide resources to the point that no one’s very effective,” Sink said. But he said he will work with anyone who is worried about the same issues as the chamber.
Small-business owners also had different opinions when asked whether a new organization is necessary.
Muriel Robinette, president of New England EnviroStrategies, a 12-person environmental consulting company in Concord that belongs to the Business and Industry Association, said she thinks a new organization is unnecessary.
“I think we’re represented fine by BIA,” Robinette said. “Like any organization, you sometimes disagree, but it doesn’t mean you have to create additional organizations that are 80 percent redundant for the 20 percent we might disagree with BIA.”
But Larry Fingelais, owner of Tuxedo Painting in Bow, which has eight to 15 employees, said he would like to see a new organization. Fingelais is a member of the Business and Industry Association and the local Better Business Bureau. He said both groups have been helpful with training and other assistance. But, Fingelais said, there is a lack of action on legislative issues.
“There really isn’t anyone going to the Legislature about small-business issues,” Fingelais said.
“They’re going about business issues, not small-business issues.”
For example, Fingelais said, larger organizations might advocate for a break in the capital gains tax, but such a change would help large businesses more than small businesses. Fingelais said he would particularly like to see an organization capable of getting affordable workers’ compensation and insurance coverage for small businesses.
At least two other small-business owners said their biggest worry was health insurance. They hoped that forming an association would give them a voice - for example, by banding together to negotiate a group insurance rate.
“I think there definitely is a need to help protect small businesses,” said Tim Farmer, owner of S&W Sports in Concord. “I think it would be great.”
By SHIRA SCHOENBERG Concord Monitor
The painter and the local pizza parlor have a new voice in the Legislature. But do they need one?
Former Republican state Sen. Bob Clegg, of Hudson, a lobbyist for the company Legislative Solutions, recently founded the Small Business and Small Industry Association.
“It’s designed to have a voice in Concord for all the small businesses that now don’t seem to have anyone to speak for them,” Clegg said.
But business advocates say Clegg’s organization is trying to fill a nonexistent need.
“The small-business community is very effectively represented by the Business and Industry Association, local chambers of commerce, trade associations around state,” said Business and Industry Association President Jim Roche.
Clegg said the Small Business and Small Industry Association is not meant to compete with the Business and Industry Association, because they serve different types of businesses.
“You can’t represent Liberty Mutual and Bob’s Painting Contractors, because their interests are not the same,” Clegg said.
Clegg said he hopes to work with the larger group on “issues of mutual interest.” At the same time, he said, his group will focus specifically on smaller businesses – the local corner store, contractor and house cleaner.
“When there’s a voice in legislation (saying) let’s tax the little guy, we’ll be there,” Clegg said.
The Small Business and Small Industry Association’s first campaign will be to repeal the new 5 percent tax on limited liability companies and partnerships, Clegg said. The state revenue commissioner told legislators when the tax was under discussion that an LLC tax would close a loophole that allowed LLCs to pay a lower tax rate, since LLCs are exempt from a 5 percent interest and dividends tax.
Clegg said it is unfair for small businesses to be taxed for the business profits tax and then be taxed another 5 percent on any money the business partners make off their work. Large corporations, he said, don’t face the same tax.
“It stifles growth, and it’s wrong for big business to say it’s OK to do this to the little guy,” Clegg said. “How about they tax Jim Roche’s wage? He’s not paying 5 percent income tax, why should I (as the small businessman)?”
The new association will be a nonprofit with a board of directors. Among the directors so far are several small-business owners and Phillip Blatsos, former commissioner of the state Department of Revenue Administration.
Roche disagrees with Clegg that the interests of small and large businesses are different.
“I think 99 percent of the time, the concerns of the small business, midsize company and large company are the same,” Roche said.
Roche said the Business and Industry Association never supported the LLC tax. Since it passed, he said, the organization has been trying to understand it and ensure that it is fair and takes business hardships into account.
“If we can’t have all our questions answered … it’s possible we’d seek repeal of the provision when the session starts in January,” Roche said.
Roche said Clegg was “clearly trying to trade on name and good reputation of the BIA” while ignoring the work done by the association and local chambers of commerce.
“To report that the small-business community is not being represented effectively or at all is way off base,” Roche said. “He’s simply wrong on the facts.”
The Business and Industry Association represents large and small businesses. Concord-based members include groups as diverse as the state Department of Health and Human Services, the New Hampshire National Guard and Grappone Automotive Group. Businesses pay for their membership depending on the size of their New Hampshire payroll, so membership fees can range from $260 to $18,000, according to the association.
Tim Sink, president of the Greater Concord Chamber of Commerce, had a mixed view of the new organization.
“I think to the extent that we can increase small businesses’ voice in front of the state Legislature that’s a good thing.” Sink said. “I’m a little concerned that creating new organizations at this point might be somewhat redundant.”
Sink said that in addition to the work of the Business and Industry Association, local chambers of commerce have government affairs programs and work with retail merchants associations.
“I always get a little concerned when we create more organizations that you can divide resources to the point that no one’s very effective,” Sink said. But he said he will work with anyone who is worried about the same issues as the chamber.
Small-business owners also had different opinions when asked whether a new organization is necessary.
Muriel Robinette, president of New England EnviroStrategies, a 12-person environmental consulting company in Concord that belongs to the Business and Industry Association, said she thinks a new organization is unnecessary.
“I think we’re represented fine by BIA,” Robinette said. “Like any organization, you sometimes disagree, but it doesn’t mean you have to create additional organizations that are 80 percent redundant for the 20 percent we might disagree with BIA.”
But Larry Fingelais, owner of Tuxedo Painting in Bow, which has eight to 15 employees, said he would like to see a new organization. Fingelais is a member of the Business and Industry Association and the local Better Business Bureau. He said both groups have been helpful with training and other assistance. But, Fingelais said, there is a lack of action on legislative issues.
“There really isn’t anyone going to the Legislature about small-business issues,” Fingelais said.
“They’re going about business issues, not small-business issues.”
For example, Fingelais said, larger organizations might advocate for a break in the capital gains tax, but such a change would help large businesses more than small businesses. Fingelais said he would particularly like to see an organization capable of getting affordable workers’ compensation and insurance coverage for small businesses.
At least two other small-business owners said their biggest worry was health insurance. They hoped that forming an association would give them a voice - for example, by banding together to negotiate a group insurance rate.
“I think there definitely is a need to help protect small businesses,” said Tim Farmer, owner of S&W Sports in Concord. “I think it would be great.”
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