• Small Businesses Continue to Bear Disproportionate Share of Federal Regulatory Burden
• Hurricane Katrina – IRS Tax Updates
• State Update: Oregon Increases Protections for Small Businesses

Small Businesses Continue to Bear Disproportionate Share of Federal Regulatory Burden

America’s smallest firms bear the largest per employee burden of federal compliance costs, according to a study released this week by Small Business Administration (SBA) Office of Advocacy. The study found that firms with fewer than 20 employees spend $7,647 each year per employee to comply with federal regulations as compared with $5,282 spent by firms with more than 500 employees. The study found that the annual cost of federal regulations was $1.1 trillion in 2004. Small businesses face a 45 percent greater burden than their larger business counterparts. The report found that environmental and tax compliance regulations have the most disproportionate effect on small businesses. Compliance with environmental regulations cost small firms 364 percent as compared with larger firms and tax compliance is 67 percent higher. To read the entire study or for more information, visit http://www.sba.gov/advo/research/rs264tot.pdf.

Hurricane Katrina – IRS Updates

The Internal Revenue Service (IRS) has issued the following updates on Hurricane Katrina Relief: 401(k) s and similar employer-sponsored retirement plans can make loans and hardship distributions to victims of Hurricane Katrina and members of their families. In response to the continued shortages of diesel fuel caused by Hurricane Katrina, the IRS will extend the penalty relief when dyed diesel fuel is sold for use or used on the highway. The penalty relief will apply throughout the United States. Hurricane Katrina relief workers, in addition to those directly affected, will have until January 3, 2006 to file any returns and pay any taxes due. Several thousand telephone operators are helping the Federal Emergency Management Agency (FEMA) answer telephone calls from Hurricane Katrina victims. The IRS has 2,743 employees working these telephone calls at locations in Atlanta, Buffalo, Dallas and Philadelphia. The IRS will increase the number of employees to reach nearly 5,000. Those needing FEMA assistance can call 1-800-621-FEMA (3362). For more information on the IRS tax relief programs, visit http://www.irs.gov/. NASE Members in Disaster Areas The NASE is looking into the status of our members and the damage done to their homes and businesses. The NASE encourages members in Louisiana, Mississippi, Alabama, and Florida to utilize these federal resources: http://www.sba.gov/disaster_recov/index.html http://www.fema.gov/ IRS toll-free disaster hotline - 1-866-562-5227 These agencies are providing grants for rebuilding as well as tax relief for those affected by Hurricane Katrina. What YOU Can Do to Help The Red Cross is accepting donations to continue the relief effort. Visit www.redcross.org to make a donation to the hurricane relief fund. Women-Owned Businesses Unite The National Association of Women Business Owners (NAWBO) Institute for Entrepreneurial Development has teamed with Center for Women’s Business Research, Count-Me-In, and others to support women business owners impacted by Hurricane Katrina. According to the Center for Women’s Business Research, there are 370,937 women entrepreneurs in Louisiana, Mississippi, and Alabama with 47,000 in New Orleans alone. NAWBO has created the Web site www.womenbizrelief.com to connect women business owners who want to help with owners affected by the hurricane. Additionally, NAWBO will work with Count-Me-In to distribute grants to women business owners trying to rebuild their businesses. The grants have been made possible through donations, the first $10,000 of which were matched by NAWBO. For more information or to make a donation, visit www.nawbo.org.

State Update: Oregon Increases Protections for Small Businesses

Oregon’s small businesses may experience a friendlier regulatory environment, thanks to a new law that gives Oregon small businesses a voice in the state’s regulatory process, according to the Small Business Administration. Upon signing the regulatory flexibility bill Governor Ted Kulongoski said, “I’m pleased that our collaboration with the SBA and others has delivered this model legislation for Oregon. These changes will help us continue to strengthen Oregon’s business climate while maintaining our high standards and quality of life.” The new law is based on model legislation designed by the SBA Office of Advocacy and is similar to the federal Regulatory Flexibility Act, a model that encourages entrepreneurial success by requiring state agencies to consider the impact of regulations on small businesses before they are finalized. The new law enhances Oregon's administrative procedure laws by including a requirement that state agencies analyze the economic impact of a proposed regulation on small business before they regulate. It also requires state agencies conduct a review of existing rules every five years to ensure the rule has had its intended effect and that there is a continued need for a rule. The bill’s sponsor state Representative Kim Thatcher said, “Small companies are the backbone of our state’s economy and should not have to shoulder disproportionate regulatory costs and burdens. Not only does the new law require agencies to understand the economic impact of their actions on small business before they regulate, but it also requires agencies to review existing regulations which may unduly burden small business.” For more information on the regulatory flexibility legislation model, visit http://www.sba.gov/advo/laws/law_modeleg.html.