Updates on Tax and Fee Issues

SBA ARC Loan Program Offers Viable Businesses Bridge Loans
If your small business is stressed meeting expenses during these economic times, the U.S. Small Business Administration has a new loan program designed just for you.
The Small Business Administration began issuing America Capital Recovery Loans on June 15th. They offer up to $35,000 in short term relief if your business has a valid business and marketing plan.
SBA's America's Recovery Capital Loan Program can provide up to $35,000 in short-term relief for viable small businesses facing immediate financial hardship to help ride out the current uncertain economic times and return to profitability. Each small business is limited to one ARC loan.
ARC loans will be offered by some SBA lenders for as long as funding is available or until September 30, 2010, whichever comes first. SBA Participant Lender Fact Sheet
Other no fee SBA loans are also available to qualified applicants.

Every Small Business Has a Stake in the Health Care Reform Debate
One change that may come out of this Congress is Health Care Reform. A lot is at stake for small business, including coverage mandates or proposals to tax health insurance benefits provided by employers. Senators Dodd and Baucus are heading up the effort on the Democratic side in the Senate and are said to be eager for a bipartisan compromise. Senator Dodd said on Sunday morning news shows that he opposed taxing health insurance benefits provided by employers, which is supported by some Republicans and is under consideration by the Obama Administration. The Congressional Budget Office reported this week that the Dodd bill would only cover 1/3 of the uninsured and cost $1 trillion over 10 years.

On the Republican side the Patient Choice Act was introduced by Senators Coburn, M.D. (R-OK) and Richard Burr (R-NC) and U.S. Representatives Paul Ryan (R-WI) and Devin Nunes (R-CA). This bill proposes providing a $5,710 tax credit for health insurance per family. However, anything over that amount paid by the employer will be taxed because The Patient's Choice Act will equalize treatment of wages and health coverage under the tax code. This provision adds a new tax to many aging, small business owners unless the premium weighting for age are removed. Even without a negative loss experience or major medical condition, older workers on group plans with high deductibles have seen 20% to 30% premium increases. Group plans usually require workers to be covered for pre-existing conditions when they shop around for coverage. Individual policies can be less expensive per person than small group policies but usually exclude coverage for pre-existing conditions when changing policies or carriers.

We haven’t learned what will happen to the popular Health Saving Account, which allows employees to save for medical expenses in high deductible policies with a pre-tax payroll deduction.

Other obstacles face Health Care Reform. With ballooning federal deficits, the costs of expanding coverage could be as much as $100 billion per year or more. House Democrats and the Administration want a public plan similar to Medicare to compete with private health insurance. Republicans and some blue dog Democrats oppose this option because Medicare is going broke. Look for a more detailed synopsis of health care reform and what it means to you in the next AOA newsletter. Among legislative proposals, health care reform is an odd duck because the rising costs have created some unusual coalitions.

Maine Passes Tax Reform Measure with New Tax on Recreational Services
Cash strapped governments at every level are promoting legislation to raise fees on small businesses. The Governor of Maine signed tax reform legislation that includes taxes on “sightseeing services”, including whitewater rafting. However, thanks to work by outfitters and with information provided by AOA, Maine outfitters were able to exempt from taxation, sightseeing tours on navigable waters. Ski lifts are also exempted.

That provision reads: “(4) Fees charged for scenic and sight-seeing excursions including aircraft, helicopter, balloon, blimp, watercraft, railroad, bus, trolley and wagon rides, whitewater rafting and guided recreation, but excluding scenic and sight-seeing excursions on federally navigable waters; and”

However, the state’s tax collectors do not consider whitewater rivers to be navigable apparently. So, some additional work remains, but outfitters owe a special thanks to Suzie Hockmeyer for leading this effort.

Taxing Talk
The IRS is considering activating a 1989 provision in the tax code that taxes personal use of business cell phones. 25% of an employee's annual phone expenses would automatically be a taxable benefit. A worker in the 28% tax bracket, whose wireless device costs the company $1,500 a year, could see $105 in additional federal income tax, according the Wall Street Journal

Get Involved in Travel Management Plans for National Forests and BLM Lands
The Forest Service and BLM throughout the country are developing Travel Management Plans which will decide which types of uses are allowed on various trails. The Plans are being developed in direct response to the explosion of Off Highway Vehicles (OHV). In Colorado there are 132,166 registered OHV’s and the riding community is well organized. Other states are also seeing increased use of OHV’s and conflicts are occurring as a result. The plans will also designate trails for other uses as well determine which are suitable for OHV use.

A list of the Travel Management Plans under development throughout National Forests can be found by clicking HERE. The status of a plan may not be up to date on the site, so check with your Forest for the latest status. The main site for Travel Management Planning for the Forest Service can be found HERE.

Nationally this process is scheduled to be complete by 2010.

Unless you comment on the plan for your area when the comment period opens for a draft plan, you may lose any rights to challenge the outcome. Each plan will be specific to your resource, so there is no generic set of comments although we do know some issues that we will be able to provide some help on.

California Threatening to Close State Parks as State Reels from Budget Crisis
Outfitters operating in State Parks in California have a new challenge as Gov. Schwarzenegger's proposal would slash about $70 million from the state's $150 million general fund allocation for parks. An additional $143.4 million would be saved in the following fiscal year by keeping the parks closed. Of the state's 279 parks, 220 could face closure. California is reeling from a $24 billion dollar shortfall.

A proposal to add $15 to non commercial vehicle registrations has been proposed to keep State Parks open. To help keep California State Parks open go to http://ga3.org/campaign/budget_may09

Travel Promotion Act Stymied in the Senate
With more than 40 sponsors the Travel Promotion Act proposes to raise $200 million annually to promote international travel to the U.S. through a government sanctioned, nonprofit corporation. $100 million would come from fees attached to the authorization from the visa waiver program. Another $100 million would be assessed on the travel industry, although up to 80% million could be in-kind. Opponents of the bill were successful in blocking it from coming to a vote in the Senate in June. The list of sponsors can be found by clicking HERE. .