Expect 2019 to be quiet in Congress--for small business

By Joyce M. Rosenberg
AP Business Writer

NEW YORK (AP) - Small business issues often win bipartisan support on Capitol Hill, but given the divisions in the incoming 116th Congress, advocates for companies have low expectations.

Even after lawmakers deal with the partial government shutdown, a Democratic House, a Republican Senate and ongoing investigations of the Trump White House and campaign are expected to be obstacles to much small business-related work getting done.

"I think 2019 is going to be a quiet year with maybe small reforms on tax things, maybe some trade legislation getting through," said Karen Kerrigan, president of the Small Business & Entrepreneurship Council.

Company owners may see more movement in their states, said John Arensmeyer, CEO of Small Business Majority, who called governors "more aggressive than anyone" on helping small business.

A look at issues that small business advocates expect to be on government agendas in 2019:

Health care

Lawmakers were expected to introduce health care bills even before the federal court ruling last month that the Affordable Care Act is unconstitutional. Since that ruling, which is expected to be appealed and could reach the Supreme Court, House Democrats have said they plan to intervene in the defense of the law.

Democrats expect to introduce bills to limit the use of low-cost short-term health plans that have limited coverage and bolster the ACA's coverage of people with pre-existing conditions. Republican opposition to Democratic efforts is likely, although many GOP lawmakers voiced support for pre-existing condition coverage during their election campaigns.

Small business groups want Congress to pass legislation limiting increases in health care costs - but they're not optimistic.

"To do that would be controversial," said Todd McCracken, president of the National Small Business Association.

Legislation expanding the availability of association health plans, or AHPs, stalled in the 115th Congress, and could be reintroduced. These plans allow individuals like sole proprietors to band together and buy insurance. They're illegal under the ACA but the Trump administration last year issued rules making it possible for some owners to join AHPs. However, some states have laws making it difficult or impossible for their residents to join the plans, and more states might enact their own legislation.

Changes in health care law are most likely to come from the states, Arensmeyer said.


Legislation to simplify tax code provisions that affect small businesses languished in the last Congress and is expected to be reintroduced. Among other things, the Small Business Owners' Tax Simplification Act would make due dates for estimated tax payments the last date of calendar year quarters. It would also make it easier for owners to deduct their own health care premiums.

"They're common sense reforms that are supported by both sides of the aisle," Kerrigan says.

Some business groups will seek further tax code simplification because of the administrative burden taxes place on owners. But hopes aren't high.

"Any material simplification is probably not going to happen with the divided Congress," said Keith Hall, president of the National Association for the Self-Employed.


Congress is expected to consider the U.S. Mexico Canada Agreement early in 2019. The trade deal, intended to replace the North American Free Trade Agreement, is opposed by Democrats who want stronger protections for U.S. workers from low-wage Mexican competition.

Many U.S. small manufacturers export to Mexico and Canada and want the deal ratified.

"It's bad for business, particularly for small businesses, if the agreement just went away," McCracken said.

Employment issues

The Labor Department is expected to issue its new regulations on overtime - which employees must be given overtime, and which are exempt. The Trump administration is rewriting rules written under the Obama administration and then blocked by a federal judge; those rules would have doubled the pay threshold at which workers would be exempt from overtime, to $47,476 from $23,660. An estimated 4.2 million people would have been able to begin earning OT under the rules.

Kerrigan expects the rules to be issued early in the year, and predicted the threshold would be a compromise between the Obama administration version and no increase.


Legislation to repair the nation's roadways and bridges is expected in the new Congress although the Trump administration $1.5 billion proposal announced last February foundered. McCracken says the parties remain too far apart for a bill to pass - unless the economy provides some motivation for a compromise.

"Infrastructure is one of those things that can generate a lot of activity and bolster the economy," he says. Many companies that do the actual repairing of roads and bridges are small businesses like general contractors.

Internet privacy

Laws aimed at protecting consumers' privacy and personal information are expected to be pursued in state legislatures, and possibly in Congress, after California's passage last year of its Consumer Privacy Protection Act. The law, which takes effect Jan. 1, 2020, requires businesses to disclose how they use personal information and gives consumers more control over how that information is used.

The prospect of businesses having to comply with 50 different laws has some members of Congress in favor of creating a national standard. "That's where you may see some bipartisanship," Kerrigan said. But McCracken said it's unlikely such a bill would pass both houses.

Paid leave

Legislation is expected in more states providing for paid sick leave and family leave for employees. Twelve states and 20 cities and counties have sick leave laws, which allow employees to accrue paid time off for their illnesses or a family member's. Paid family leave, including time off to care for ill relatives, is the law only in California, New Jersey, New York and Rhode Island; those states have employee and/or employer-funded insurance pools to partially replace workers' wages.

Democrats in the House may also introduce family leave legislation, but it likely wouldn't survive the Senate, McCracken said.


Three things small business owners should know for 2019

By Joyce M. Rosenberg
AP Business Writer

NEW YORK (AP) - Now that the new year is here, small business owners may find themselves trying to understand changes brought about by federal and state laws. Here are three things owners need to know for 2019:

- Tax filing season. Business owners will learn what impact the new tax law is having on their finances. Many owners who are sole proprietors, partners and shareholders in S corporations will be trying to figure out if they can claim the 20 percent deduction for qualified business income. The computations for the deduction can be complex, and depend on an owner's income, and a spouse's income as well, and how much they pay their employees. There are other big changes - for example, companies like manufacturers that can now use the cash accounting method instead of the previously required accrual method will be reconfiguring their ledgers.

Owners who didn't do year-end tax planning may want to consider getting an extension of the filing deadline for their returns to give themselves breathing room. You can learn more about the new tax law and how to get an extension on the IRS website, www.irs.gov .

- Internet sales tax. The majority of states have enacted laws requiring retailers who sell in their states to collect sales tax even if they have no physical location like a store or distribution within the state. Most of the laws exempt retailers who have $100,000 or less in revenue and 200 or fewer transactions in a given state. Some of the laws are already in effect, while others go into effect during 2019. Some states have not acted yet.

Retailers can use software or services to help them collect tax, submit it to state tax authorities and compile required returns. The software is likely compatible with a retailer's e-commerce system. Search online for more information,

- California's Consumer Privacy Protection Act. The law, which potentially affects thousands of companies located outside of California, requires businesses to disclose what they do with consumers' personal information, and gives consumers more control over what happens to that data. Consumers have the right to have the information deleted from companies' computer systems. The law takes effect Jan. 1, 2020, but companies must be in compliance with some of its provisions before the end of 2019. However, the law is expected to be amended because of several contradictions and other issues. You can search online for more information; some law firms have written primers to help explain the law.

Published: Fri, Jan 04, 2019