Flashings

Guidance issued for lightweight trucks and vans

The U.S. Treasury Department released its 2002-03 Priority Guidance Plan, which contains 250 projects to be completed by June 2003. The small-business community took notice of the department's guidance issued for Section 280F of the Internal Revenue Code exempting lightweight trucks and vans from current depreciation limits. For vehicles in service during 2000, businesses could not deduct more than $14,460 in depreciation. Many argue the limit forces businesses to pay higher taxes.

Sen. Christopher S. "Kit" Bond (R-Mo.), who introduced the Small Business Leads to Economic Recovery Act of 2001 (S 1493) in October 2001, applauded the Treasury Department's action and asked the new rules be broad-based, simple and straightforward. A provision in Bond's act would have raised the depreciation limit to $25,000 and exempted lightweight trucks and vans from the limit.

"A broad rule will benefit more small firms by eliminating the depreciation limitations, burdensome calculations and record keeping imposed by Section 280F," Bond says. "A broad-based exemption will enable small enterprises to qualify without wrestling with a long list of narrow requirements."

NRCA considers the department's decision a victory. In Nov. 2001, NRCA sent a letter to U.S. Secretary of the Treasury Paul O'Neill urging him to support Bond's act. NRCA argued removing the limitation would help small businesses by providing tax relief, easing cash-flow problems and providing an incentive to purchase new vehicles.

Watch for bankruptcy bill signing

The U.S. Congress returns from its summer adjournment this month, and an important vote to watch in the House of Representatives and Senate involves the U.S. bankruptcy code bill.

After months of negotiations by a House-Senate conference committee, the House delayed its final vote because of debate about an abortion-rights provision. The provision originally prohibited abortion protestors who incur judgments because of protests from filing bankruptcy to escape paying fines. The conference committee revised the provision to remove the specific reference to clinic protesters; the provision now refers to protestors who "intentionally" protest against a "facility that or a person who provides lawful goods and services."

The bill has many provisions that would force consumers to pay their debts instead of filing bankruptcy to eliminate debt.

For example, a provision would limit homestead exemptions, which allow those who file bankruptcy to protect unlimited amounts of home equity from creditors. Bankruptcy filers would have to own a home for 40 months before shielding $125,000 in equity.

Additional provisions would allow businesses to recover debt from derivatives-trading partners in bankruptcy and force credit card companies to disclose more information about interest rates and payment schedules, as well as not allow parents to file bankruptcy to avoid paying child support.

In addition, the bill would change bankruptcy filing procedures. Before filing for bankruptcy, debtors would undergo credit counseling and evaluations to determine whether they could repay a portion of their debts. The evaluations would determine whether debtors can file Chapter 13 or Chapter 7 bankruptcy. According to The Wall Street Journal, if a debtor earns more than his state's median family income, he could not file Chapter 7 and must repay a portion of the debt in a specified time frame.

Supporters say the bill could improve the economy because consumers would not pick up debts businesses were forced to incur. The bill also is said to be a corporate reform initiative. Those opposing the bill believe it will hurt the economy.

Chao fights for better health-benefit protection

On Aug. 1, U.S. Secretary of Labor Elaine L. Chao announced How to Protect Your Employees When Purchasing Health Insurance, a program designed to help small businesses. The program includes tips for small-business owners, such as how to compare insurance coverages and costs, ask for information from state insurance commissioners and obtain references about other business owners enrolled in an insurance plan. The tips can be found at www.dol.gov/pwba/Newsroom/ltrhealthinsurancetips.html.

In addition, Chao announced support for President Bush's push for association health plan (AHP) legislation.

"Until small businesses have meaningful access to affordable, quality health-care coverage, they will continue to be vulnerable to health-insurance scams," Chao says. "[This] is why the president supports legislation creating AHPs."