Before Congress left town for its August recess last week, lawmakers approved legislation that could result in small business owners paying less tax.
The Senate Finance Committee approved a bill that, among other things, protects middle- and upper-income taxpayers, from being hit by the alternative minimum tax. The tax was originally meant to prevent the wealthy from avoiding taxes altogether, but as time has gone on, less well-heeled people — including small business owners — have ended up paying it.
The committee also approved an extension through 2013 of a tax credit for businesses that invest in research and development and an extension into 2013 of tax deductions for equipment purchases. And it voted to extend through next year the deduction for state and local taxes in states that don't have an income tax.
The House, meanwhile, voted to renew what are commonly referred to as the Bush-era tax cuts. They include a 15 percent tax rate on dividends and capital gains. If those rates are not extended, many taxpayers would pay according to the tax bracket they are in — and those rates are likely to be higher. The bill passed by the House would also keep the estate tax at its current 35 percent, with the first $5 million of an estate shielded from taxes. If that measure is not extended, the tax rates on estates could rise to 55 percent with only $1 million shielded.
It's not likely that either piece of legislation will pass the entire Congress intact. It's widely expected that after the November election, Congress will consider tax legislation with an eye toward extending relief for people who are still being hurt by the recession and its aftermath.
In a vote on non-tax legislation, the House voted to extend disaster assistance to cattle and sheep producers who are being hurt by feed prices that are soaring because of the drought this summer. The bill would restore for 2012 four disaster aid programs that expired last year. The programs also contain help for tree farmers.
Google is in the process of giving small businesses across the country the chance to create and operate a website that will be free for one year. The company started a program called Get Your Business Online in July 2011. The service became available in South Dakota and Mississippi on Monday, and it will be available in Alabama and New Mexico on Thursday. That will bring the number of states that have the free websites to 40. The program is expected to be up and running throughout the country by September.
It can take as little as an hour to set up a website if business owners have thought out what they want their sites to say, says Scott Levitan, Google's director of small business engagement. Owners should visit www.gybo.org . They'll need a Google account to log in. The site includes templates that owners can choose from to customize their web pages.
Besides building a website for free, the program allows owners to skip the $6.99 monthly payment for the site's domain and hosting for a year, Levitan says.
Google estimates that about 58 percent of small businesses don't have websites. "There is a perception that getting online is hard, expensive and time-consuming," Levitan says.
About 300,000 owners have at least started to build a website, Levitan says. It's not yet known how many are fully up and running.
The program is also under way in 30 countries around the world.
CONSTRUCTION EMPLOYMENT FALLS
Although the housing market has been showing signs of recovery, employment in the construction industry, which includes contractors and other small businesses, is falling. The culprit is the drop in construction by federal, state and local governments.
The Associated General Contractors of America, a trade group, says there were 1,000 fewer construction jobs across the country last month than there were in June. There were 5,000 more construction jobs than in July 2011.
The unemployment rate for construction workers was 12.3 percent, higher than the nation's overall rate of 8.3 percent but the lowest July reading for the industry in four years. The rate was 13.6 in July 2011, 17.3 percent in July 2010 and 18.2 percent in July 2009. In the last three years, 700,000 construction workers found jobs in different industries, went back to school or left the work force, according to Ken Simonson, the group's chief economist.
The report also said that the number of jobs in residential construction rose by 2,700, or 0.1 percent from June. New construction of single-family homes was up in June for a fourth straight month. The Commerce Department will report July numbers on Aug. 16.
MARK YOUR CALENDAR
The Small Business Administration is holding an online seminar to help business owners put a disaster plan together. Among the topics to be covered: What aspect of disaster preparation should you tackle first? The seminar will be held Aug. 14 at 2 p.m. Eastern time. You can sign up at https://www1.gotomeeting.com/register/641009256