NFIB

NOW is the time to act on technical corrections
This week, NFIB members and friends spoke loudly and clearly about a controversial provision in the administration's end-of-session technical corrections package. The provision in question would remove a franchise and excise tax exemption on family-owned non-corporate entities, or FONCEs, which are certain limited liability corporations and limited partnerships that derive passive income through commercial property. Many Tennessee small business families have FONCEs.

Legislators received many calls and e-mails this week with specific concerns from constituents. Here's what fellow members and friends are saying:

• "This would cost my business $5,000 a year." – Soddy Daisy member
• "We're trying to establish some passive income so that when we're too old to work, we'll [have enough to retire]. ... We thought when we knew we bought this property we would be exempt from [these] taxes." – Member from Unicoi County
• "The Legislature has already changed how it taxes family-owned entities [many times]. ... This would not encourage an environment that allows good business planning." – Chattanooga small business owner
• "A number of small businesses that own real estate in the business or as an investment will be hit by this additional tax. It seems to single out the small investor." – Nashville member
• "This proposal, if approved, is unlikely to generate the revenue that is being forecasted." – Chattanooga member 
• "Singling out commercial rents [from other kinds] is unfair ... [and] also discourages long-term ownership. ... The new law would discourage saving and investing in commercial real estate in Tennessee, [and] devalue real estate at a time the economy and financial markets can least afford it." – Chattanooga small business owner
• "Some small business owners [invested in these entities] as college funds. ... Changing the rules midstream would be challenging for them." – Cookeville CPA 
• "The current exemption encourages exactly the type of small family and individual ownership of Tennessee real estate [that's needed, but this proposal] will encourage large corporate-type ownership." – Chattanooga small business owner
• "Without the exemption, many of these LLCs would not have been created … . Basically, this is a proposal to increase revenue disguised as a technical correction." – Chattanooga member

NOW is the time to join your fellow members and share your concerns. If you have a FONCE or believe you have a FONCE, call your CPA immediately. If you are affected, please contact your legislators by typing your zip code into the "Action Center." Please also contact Gov. Phil Bredesen and the Department of Revenue to share concerns. In your own words, encourage all leaders to remove the FONCE provision from Senate Bill 4173 (Kyle) and House Bill 4129 (Odom).

Small group health cooperatives bill on governor's desk
On Tuesday, the House unanimously passed House Bill 4066, sponsored by Reps. Charles Curtiss (Sparta) and Charles Sargent (Franklin), by a 97-0 vote. The Senate concurred on a minor amendment and sent the legislation to the governor. Please thank your representative as soon as possible (click "House," then "Members"), and please ask Gov. Phil Bredesen to sign it into law.

The bill would let small business owners join together to negotiate for health insurance rates and give small business owners an important option to look for better rate predictability and stability. The legislation does not guarantee lower health insurance premiums, but is one important option for small employers. Read more about the initiative here and here.

Join us in Jackson, Memphis
NFIB will be hosting grassroots meetings later this month in Jackson and Memphis sponsored by Regions Bank. The Jackson Area Action Council will be held from 11:30 a.m.-1 p.m., Tuesday, May 20, at Brooks, Shaw & Sons at the Old Country Buffet (Heritage Room) at 56 Casey Jones Road in Jackson. Guest speaker is Sharon Taylor McKinney with the Tennessee Economic and Community Development Business Enterprise Resource Office. Taylor McKinney is an expert in coordinating procurement, manufacturing and international trade initiatives for small, minority and women-owned businesses within 21 West Tennessee counties. The Memphis Area Action Council will be held from 11:30 a.m.-1 p.m., Wednesday, May 21, at Regions Bank at 6200 Poplar Ave. in Germantown. Guest speaker is Shelby County Mayor AC Wharton Jr. Please contact Valerie Nagoshiner at 615-872-5331 by May 19 to make reservations.

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Sincerely,
Jim Brown
NFIB/Tennessee State Director
615-874-5288
Jim.Brown@NFIB.org