Los Angeles Business Tax Amnesty Program Announced

The City of Los Angeles agency responsible for the administration and collection of business taxes, the Office of Finance, has announced a tax amnesty program. Non-compliant businesses will still have to pay the base tax and interest due, but an automatic waiver of the usual penalty will apply (without the amnesty program, penalty waivers can be requested, but they are discretionary with the Office of Finance):

Tax Penalty Amnesty Program
Chapter II, Article 1.12, Sections 21.12.1 - 21.12.7 of the Los Angeles Municipal Code provide for the development and implementation of a Tax Penalty Amesty Program. This program, beginning May 1, 2009 and ending July 31, 2009, allows taxpayers to avoid tax penalties imposed on any taxes as a result of nonreporting, underreporting, underpayment, or nonpayment of certain taxes. Tax Penalty Amnesty is applicable to (1) Business Taxes; (2) Telephone, Electricity, and Gas Users Taxes; (3) Commercial Tenants Occupancy Taxes; (4) Transient Occupancy Taxes; and (5) Parking Occupancy Taxes.

To participate in the program, taxpayers must file an application for tax penalty amnesty during the specified dates and comply with two conditions:

1.File completed tax statements or returns for all periods and taxes for which the taxpayer has not previously filed a tax statement or return and/or file completed amended tax statements or returns for all periods for which the taxpayer underreported the taxes due; and
2.Pay in full all principal, interest, and any applicable fees (excluding penalty fees) due.
The Tax Penalty Amnesty Program is an opportunity to pay delinquent City taxes and avoid up to forty (40%) in penalties. To take advantage of the amnesty program, please visit one of our offices or call the L.A. Tax Amnesty Hotline at (213) 978-1555 weekdays from 8:00 am to 5:00 pm.

More information and applications forms available here: http://www.lacity.org/finance/amnesty/index.html

Indiana Secretary of State Corporate Minutes Mailings

From Indiana Secretary of State Todd Rokita. California may want to follow suit (although California's laws may be drafted differently than Indiana's, and it is not clear if these defendants are also behind some of the California mailings.

COMPLAINT FILED IN BUSINESS MAIL SCAM

May 21, 2009- An out-of-state operation sending deceptive solicitations to Indiana businesses for the last several months would face fines of over $1.5 million and be barred from doing business in Indiana if the state prevails in a lawsuit filed last week in Marion County court.

The complaint against Aaron V. Williams of Las Vegas, Lisa Diane Brown of California and several companies affiliated with the two was filed by Attorney General Greg Zoeller in Marion County Superior Court alleging several violations of the Deceptive Commercial Solicitation Act. The action comes after a multi-state investigation by the office of Indiana Secretary of State Todd Rokita which tracked the activities of a business operated by Williams and Brown known as "Indiana Corporate Compliance."

Indiana businesses have reported receiving letters from Indiana Corporate Compliance that appear to come from an official government source - specifically the Business Services Division of the Indiana Secretary of State's office. The letter solicits annual fees of $125 to $150 that it claims will be used for the record keeping and processing of the company's annual minutes. It also instructs businesses to respond by citing fictitious state law and including a "return by" date. The return addresses on the letters are rented mailboxes at UPS stores in Indianapolis, including one within steps of the Indiana Statehouse.

"The actions of these out-of-state scam artists to bilk Indiana businesses are deceptive, despicable, and likely criminal," said Secretary Rokita. "I will do everything I can to stand up for Indiana businesses and shield them from financial attack. I thank Attorney General Zoeller and his team for helping bring legal action."

Secretary Rokita has issued warnings through the media, sent e-mails to Indiana businesses and posted warnings on his Web page to ignore the letter. Still, businesses report falling victim to the scam and have sent money in response to the letter. No business has reported receiving any services from Indiana Corporate Compliance. Secretary Rokita's office continues to investigate and is developing a criminal case against Williams and Brown.

State law requires periodic business entity reporting, but with fees of only $30 every two years for for-profit entities and $10 every year for non-profit organizations. Businesses operating in Indiana can now securely perform this reporting online through the INBiz portal found on the Secretary of State's Web page, www.sos.in.gov/business.

If you believe you fell victim to this solicitation, please contact the Business Services Division Help Line at (317) 232-6576. Businesses wishing to check the validity of any mailing from Indiana's Business Services Division or any division of the Office of the Indiana Secretary of State should also call this number.

See also: California Corporate Compliance Minutes

SBA Announces No-Interest Loans for Struggling Businesses

PRESS OFFICE/LOS ANGELES

Release Date: May 18, 2009 Contact: David J. Hall (202) 205-6697
Release Number: 09-30 Internet Address: http://www.sba.gov/news

SBA Launches New 100-Percent Guarantee ARC Loan Program to Help Struggling Businesses

WASHINGTON – Small businesses suffering financial hardship as a result of the slow economy may be eligible to receive temporary relief to keep their doors open and get their cash flow back on track through to a new loan program announced today by SBA Administrator Karen G. Mills.

Beginning on June 15, SBA will start guaranteeing America’s Recovery Capital (ARC) loans. ARC loans are deferred-payment loans of up to $35,000 available to established, viable, for-profit small businesses that need short-term help to make their principal and interest payments on existing qualifying debt. ARC loans are interest-free to the borrower, 100 percent guaranteed by the SBA, and have no SBA fees associated with them.

“These ARC loans can provide the critical capital and support many small businesses need to make it through these tough economic times,” said Administrator Mills. “Together with other provisions of the Recovery Act, ARC loans will free up capital and put more money in the hands of small business owners when they need it the most. This will help viable small businesses continue to grow and thrive and create new jobs in communities across the country.”

“It’s my firm belief that we will soon see better days ahead with these Recovery Act tools including this highly anticipated deferred-payment loan that can now aid small business owners confronting these dynamic conditions,” said Alberto G. Alvarado, Los Angeles SBA District Director.

As part of the Recovery Act, the ARC program was created as a no-interest, deferred payment loan to help small businesses that have a history of good performance, but as a result of the tough economy, are struggling to make debt payments.

ARC loans will be disbursed within a period of up to six months and will provide funds to be used for payments of principal and interest for existing, qualifying small business debt including mortgages, term and revolving lines of credit, capital leases, credit card obligations and notes payable to vendors, suppliers and utilities. Repayment will not begin until 12 months after the final disbursement. Borrowers don’t have to pay interest on ARC loans. After the 12-month deferral period, borrowers will pay back the loan principal over a period of five years.

ARC loans will be made by commercial lenders, not SBA directly. For more information on ARC loans, visit www.sba.gov


http://www.sba.gov/idc/groups/public/documents/sba_homepage/news_release_09-30.pdf

Study Names "Most Free" States; California Ranks Poorly

A recent George Mason University study ranked the 50 U.S. states on a freedom scale, attempting to turn the various economic, social, and personal freedoms available in each state into a number, allowing comparison and ranking.

According to the researchers, the "freest" states are New Hampshire, Colorado, and South Dakota: "All three states feature low taxes and government spending and middling levels of regulation and paternalism."

On the other end of their spectrum, "New York is the least free by a considerable margin, followed by New Jersey, Rhode Island, California and Maryland."

A color-coded freedm-ranked map of the states is available here.

Blog Post Cited in Orange County Register Article on Annual Minutes Mailings

This blog's most popular entry, posted in January 2007 but updated continually since, concerning misleading corporate and LLC annual minutes mailings was recently cited in a small business advice column in the Orange County Register:

Old scam reappears in O.C.:

Burbank attorney Jonas Grant gives a good explanation of the law on his California Business Law Blog, based on problems his clients reported to him in 2007. The post has gotten dozens of comments from people who received these solicitations, some from other states.

(One even accuses Grant of sending the letters, thus the red-letter disclaimer at the top of his post. Talk about shooting the messenger.)

By Jan Norman, March 29, 2009

California Sales Tax Rate Increase

Effective April 1, 2009, but unfortunately not an April Fool's Day joke is a 1% rate increase to California's sales tax, for a new total of 8.25%. In addition, certain cities and localities may add an additional surcharge of up to 2.0%, for a grand total not to exceed 10.25%, among the highest sales tax rates in the nation. Los Angeles County's rate is now 9.25%.

More detailed information is provided in this notice issued by California's sales tax authority, the Board of Equalization (CA "BOE").

See also:

California Legislature Plans to Increase Taxes Amid Recession

Free Legal Forms Online

Adams Drafting, a blawg of interest primarily to business attorneys, has an interesting post and following discussion regarding the use, misuse, and dangers of free legal forms found on the Internet or elsewhere: With Free Online Forms, You Get What You Pay For. Excerpts:

The problem isn’t a shortage of free legal forms online. Instead, it’s that there’s available online for free a vast and ever-growing supply of contract models, most of them crappy, and separating what’s OK, in terms of language and substance, from what’s not OK is a gruesome task....


I see the problem as being not that the documents are inherently incorrect in themselves - I’m sure the good sites produce very sound documents - but that they are drafted in the abstract. If a person pulls a document from any standard database - whether one of these sites or their own firm’s standards - it will be blind luck if it actually works for the agreement they are trying to draft for without amendment. Then there seem to be three options:

(i) The document as just used as-is - the document is unlikely to fit the deal.
(ii) A non-lawyer makes some changes. The problem here is the risk of unintended legal consequences of a change.
(iii) A lawyer reviews it. Clearly the issue here is cost.

I suppose people just need to balance those factors, but for any deal worth anything significant, it is likely to be worth having a lawyer have a look, at which point it is more cost-effective for them to use their own standards.

See also Factual Error Found On the Internet, The Onion, 2002.