11/24/2008
Privacy regulations (data security)
Implementation is certain to impose costly new requirements on small businesses to ensure the protection of personal information. Prior to a legislative committee's informational hearing on the proposed new regulations this week, the administration announced that the implementation date for the new regulations would be delayed until May 1, 2009. The requirement that information stored in non-laptop computers be encrypted will be delayed until Jan. 1, 2010, as will the requirement to obtain written certification of compliance from third party vendors. Personal information stored on laptop computers must be encrypted by May 1, 2009. Details of the privacy regulation and its potential impact on your business are available on the NFIB/Massachusetts Web page.
FY 09 state budget
The states' revenues from taxes were off almost 5 percent from October 2007 ($58 million) and $123 million below expectations for balancing the state's $28.2 billion FY09 budget. While receipts in the first two weeks of November were $40 million ahead of last year, the gain was attributed to a one-time event. Tax collections for the first four months of the fiscal year are off $30 million from a similar period in 2007, with sales tax revenues and corporate and business taxes leading the downward trend. Sales tax collections are off 5.7 percent ($207 million) and those areas to which sales tax revenues are earmarked -- the MBTA and school building authority -- received $40 million less than projected a few short months ago. Monthly tax revenues are now expected to remain below 2008 levels until at least May or June 2009. The governor continues to work with the legislature to add to his ordered reductions for current year to a total well above $1 billion. Capital gains tax receipts will determine the extent of budget reductions but the FY 2010 state budget is expected to be about 8 percent below the $28.2 billion FY09 plan, or a bottom line of about $26 billion.
The state's unemployment rate increased to 5.3 percent in October as the state shed 3,800 jobs.
Lawsuit abuse
Upon my return from the annual American Tort Reform Association, right on cue, a study released by the Massachusetts Medical Society concludes that fear of lawsuits among Massachusetts' physicians is leading to the practice of defensive medicine -- costing $1.4 billion in additional healthcare costs. These costs are reducing access to care and making health insurance less and less affordable -- particularly for small business. Doctors reported that 18 to 28 percent of tests, procedures, referrals and consultations and 13 percent of hospitalizations were ordered for defensive reasons.
We will support renewed efforts in the 2009 legislative session to reform the medical liability system to reduce health insurance costs for small business owners and their families and employees.
New taxes, new coalition
Several interest groups including human service advocates, organized labor, and community groups met last week to discuss, in the words of one participant, "creating a drumbeat for higher taxes." The meeting took place just two weeks after efforts to repeal the state income tax were soundly defeated at the polls.
In the wake of the Turnpike Authority's initial approval of dramatically higher tolls for roads, bridges, and tunnels in and around Boston, several legislators including Speaker DiMasi, voiced support for substituting a gas tax increase for the larger tolls. Gov. Deval Patrick (in an unusual letter to legislators) and Senate President Murray were less enthusiastic about a gas tax increase. Both urge progressing more slowly as unemployment rises and as new operating efficiencies are adopted in a reorganization of transportation agencies, including consideration of privatizing the Turnpike. A legislative vote to delay implementation of toll increases is possible, but significant action will most likely come in 2009.
And in D.C.
The IRS' 2009 Small Business/Self-Employed Tax 12-month wall calendar is available. It contains business tax information and day-to-day reminders, including the 2008 Economic Stimulus Act, Section 179 Expensing, Minimizing Identity Theft, and Disaster Recovery for small businesses. You can download the business tax dates and reminders to your Microsoft Outlook calendar, and access the calendar via electronic organizers and portable handheld devices. To order call 800-829-3676 or go to www.irs.gov.
