Tax Cuts To Benefit BSCs?
In his State of the Union address and at other policy talks, President Bush proposed some sweeping changes to the United States tax laws.

One of those proposed changes allows small businesses to write off up to $75,000 in capital purchases immediately, up from the current limit of $25,000. With that limit, building service contractors could immediately get a tax deduction on more equipment, such as computers, floor machines and truck mounts, instead of depreciating the purchase over time.

Another proposal is the elimination of taxes on dividends paid. Currently, corporations pay taxes on profits they make; then, some return the after-tax profits to shareholders in the form of dividends, who then must pay income taxes on them. Eliminating the dividend tax would help publically traded contractors that pay dividends to their stockholders, making investment seem more attractive.

Also, BSCs who are sole proprietors pay personal income taxes on their business income, so they could benefit from accelerated reduction of the personal income-tax rate. Under the proposal, reductions previously planned for 2006 would take effect in 2003.

Overall, this tax-cut proposal, combined with other elements of the Bush budget plan, will be quite beneficial to BSCs if it’s approved, says Mike McNamara, government affairs counsel for Building Service Contractors Association International.

“I think, if it’s enacted, this is very favorable, and very pro-business,” says McNamara. “This agenda is very attuned to what contractors have been pushing.”

Although things seem promising at the federal level, McNamara warns BSCs to stay aware of measures in their own states. Most states are coping with large budget shortfalls, and some have introduced service sales taxes to raise revenue, he says.

SBA Helps Reserve Call-Up Confusion
With the ongoing fight against terrorism and a war in Iraq looking likely, building service contractors may face the departure of some of their employees — or themselves — when they are called up from the reserves to active military service. When these soldiers deploy, BSCs must scramble to shuffle duties and find temporary replacements. In most cases, returning employees are entitled to the same job, seniority and compensation they would have had they not been activated.

The U.S. Small Business Administration’s (SBA) Office of Veterans Business Development (OBVD) can help. The department has created a resource for companies that have essential employees called to active military service.

The Web site, is part of a larger effort by the OBVD to provide timely information to members of the National Guard and National Reserve who are business owners or essential employees.

Chao Pushes For Health Plans
U.S. Secretary of Labor Elaine Chao recently testified before a Senate committee, urging the passage of President Bush’s health-care initiative, which would allow the creation of association health plans (AHPs).

AHPs would allow small businesses to band together to provide health coverage for their employees, using economies of scale and a larger risk pool to cut costs. The Congressional Budget Office estimates AHPs could lower health-insurance premiums by 13 percent and extend coverage to approximately two million Americans who are currently uninsured.

Environmentally preferable purchasing
City Develops Green-Procurement Video
More building service contractors who do business with local, state or federal government agencies will need to become familiar with the term “environmentally preferable purchasing” (EPP). For example, by executive order, contractors to the U.S. government who utilize recycled, pollution-reducing and less hazardous products and cleaning methods are given preference in the bidding process over those who don’t. Hospitals, schools and other organizations, public and private, also are encouraging or requiring their cleaning contractors to purchase with the environment in mind.

To help, contractors can order an eight-minute video from the Center for a New American Dream. The video was produced by the City of Santa Monica, Calif., with help from the U.S. Environmental Protection Agency's Environmentally Preferable Purchasing Program.

The video, designed as a general overview, introduces EPP and explains why more communities are adopting these programs, the benefits and how to begin. Cleaning-product purchasing is included in the overview. The program highlights some of the early EPP adopters, such as Santa Monica; King County, Wash.; the commonwealth of Massachusetts; and the state of Minnesota.

Copies of the video are available for $12.




POSTED ON: 2/1/2003