California Tax Measure Adversely Impacts Small Business

Organizations Working on Behalf of 3.2 Million Small Businesses
Request Exemption from Loss Carryover Tax Suspension
SAN FRANCISCO--(Business Wire)--
Prestigious business organizations throughout California are
urging Sacramento legislators and Governor Arnold Schwarzenegger to
grant an exemption for small businesses in a proposed tax measure
suspending net operating losses for three years.

The controversial tax measure -- one provision in a state budget
plan calling for $8.2 billion in new taxes -- is designed to close a
loophole for large corporations and generate $1.1 billion for the
state. But small businesses earning less than $5 million in revenue
may suffer the most negative effects.

"Although 80 percent of the total taxes would come from businesses
with more that $5 million in revenues, more than six small businesses
would be impacted for every large one," according to Scott Hauge,
founder and president of Small Business California, a business
advocacy organization, and president of CAL Insurance & Associates in
San Francisco.

"California's economy is driven by 3.2 million small businesses
that struggle to endure economic downturns, while investing in future
growth and creating most of the new jobs at considerable personal and
financial risk," Hauge adds. "The issue is not just a 'small business'
issue. It's really about the state's overall economy."

Companies in California are permitted to carry forward net
operating losses incurred in one year and use them as deductions
against earnings in future years. The proposed budget would suspend
the losses for three years. If a business operates at a loss -- often
the case with start-ups or businesses that add employees, expand
inventory or upgrade equipment -- it could not carry over that loss in
subsequent years to mitigate the tax burden.

The list of 29 organizations signing a letter to state legislators
requesting the exemption includes key chambers of commerce, local
merchant groups, and statewide manufacturing and building
associations:

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Asian Business Association of Orange County
Associated Builders and Contractors of California
Building Owners and Managers Association of San Francisco
California Association of Competitive Telecommunications
Companies (CALTEL)
California Association for Micro Enterprise Opportunity (CAMEO)
California Chapter of the American Contractors' Association
California Employers Association
California Fence Contractors' Association
California Metals Association
Engineering Contractors' Association
Flasher/Barricade Association
Golden Gate Restaurant Association
Los Angeles National Association of Women Business Owners
Marin Builders' Association
Napa Chamber of Commerce
National Association of the Remodeling Industry San Francisco Bay
Area
Oakland Metropolitan Chamber of Commerce
Plumbing Heating and Cooling Contractors of California
San Diego Chamber of Commerce
San Francisco Chamber of Commerce
San Francisco Council of District Merchants Associations
San Francisco Hispanic Chamber of Commerce
San Francisco Marina Merchants Association
San Francisco National Association of Women Business Owners
San Francisco Small Business Advocates
San Francisco Small Business Network
Small Business California
Small Business Majority
Small Manufacturers Association of California
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PVB Public Relations
Paul von Beroldingen, 415-751-1858 (Off)
Cell: 415-264-8524
paul@pvbpr.com
or
Small Business California
Scott Hauge, President, 415-680-2109 (Off)
Cell: 415-699-9100
shauge@cal-insure.com

Copyright Business Wire 2008