Legislative Update from the State Capitol

Date: February 18, 2014

Small Business Bill of Rights

Ever felt like you were being bullied by a government inspector or auditor? Ever ask yourself if such intimidating behavior was legal? Rep. Tom Forese has worked with NFIB to draft Small Business Bill of Rights legislation (House Bill 2260) that would require prior written disclosure of small-business owners’ due process rights during state regulatory enforcement actions or audits.

The bill, which has passed out of the House Commerce Committee, would also enhance executive branch accountability and legislative oversight of state agencies by collecting data on the scope and severity of bullying by state regulators. In related developments, NFIB also released survey results from its 2014 Arizona State Ballot that found 94 percent in favor of greater disclosure of a small-business owner’s due process rights during an audit, inspection or other state regulatory enforcement action. Only 2 percent opposed more disclosure and 4 percent were unsure.

Sales Tax Filing Frequency

NFIB-priority legislation originally introduced in 2013 by Sen. Steve Farley that would cut back on the frequency of sales tax filings for many smaller retail outlets has been reintroduced this session in both the House and Senate. Both versions (House Bill 2288 and Senate Bill 1134) have already cleared committees. See the chart below.

Small Business Agenda on the Move

School Tuition Organization Tax Credit for S Corps–The full Senate passed NFIB-priority legislation (Senate Bill 1048) that would permit shareholders of small businesses organized for tax purposes as S corporations to claim the same tax credits for contributions to school tuition organizations that are only available to C corporations. A significant number of Arizona’s small business owners organize their businesses as S corps and SB 1048 would correct the inequity they have relative to C corps when applying this tax credit to their return. Different from the individual STO tax credit that is capped at approximately $1,000 per person or just over $2,000 for a married couple, the C corp STO tax credit program is not capped per taxpayer though the overall program has an aggregate cap of nearly $40 million per year.

Navigator Licensure–The House Insurance & Retirement Committee passed NFIB-priority legislation (House Bill 2508) that would ensure Obamacare navigators receive criminal background checks and are licensed by the state. Just prior to the hearing NFIB released survey results from its 2014 Arizona State Ballot that found 81 percent in favor of state regulation of navigators, with 7 percent opposed and 12 percent unsure.

Class 6 Expansion–NFIB registered opposition to our first bill (Senate Bill 1303) of the Arizona Legislative session last week. In a nutshell, Grand Canyon University would like to be moved from property tax Class 1 (19 percent assessment ratio) to Class 6 (5 percent assessment ratio). Homeowners are in Class 3 (10 percent assessment ratio). NFIB’s concerns center on expanding the eligibility for Class 6. We fear passing SB 1303 would usher in a new era of special interest favor-seeking in our property tax system. This fresh contest for Class 6 inclusion promises to shift a greater property tax burden onto small businesses that are in Class 1. NFIB has nothing against Grand Canyon University as an institution, our opposition is solely based on our belief that Class 6 designation has already been abused and shouldn’t be abused any further. Regardless, the Senate Finance Committee passed SB 1303 on a 6-1 vote despite opposition from NFIB, Arizona Tax Research Association, Arizona Free Enterprise Club, NAIOP and Arizona Rock Products Association.

Small Business Day at the Capitol

NFIB/Arizona’s recent 2014 Small Business Day at the Capitol was a big success. Click here to see photos from the event.

NFIB/Arizona in the Press

Bill would require background checks, more for health exchange navigators (Cronkite News, 2/5/2014)
Requiring background checks and state licensing for navigators and others helping Arizonans register for health insurance under the Affordable Care Act would guard against identity theft, a state lawmaker contends. You can read the full story here.

Bill to license health-act aides advances (Arizona Republic, 2/4/2014)
Supporters of House Bill 2508 said the scrutiny is needed to protect consumers from fraud or misuse of personal information… The bill would require navigators and counselors to apply for a license from the Arizona Department of Insurance, submit fingerprints for a criminal-background check and pay a licensing fee. You can read the full story here.

Legislative leaders meet with small business owners over economic challenges (Ahwatukee Foothills News, 1/31/2014)
The government is making it difficult for small business owners to make money, said members of the National Federation of Independent Business and guests at the 2014 Arizona Small Business Day at the Arizona Capitol on Tuesday. You can read the full story here.

Small-business owners call for less regulation, lower taxes (Cronkite News, 1/28/2014)
Reducing taxes and government regulation would help Arizona’s small businesses bolster the economy and create jobs, advocates said Tuesday in making their case to state lawmakers. “We want the government to do less,” Farrell Quinlan, state director for the National Federation of Independent Business, said during Small Business Day outside the State Capitol. You can read the full story here.

Related Content: Small Business News | Arizona

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