BILL TO EXTEND TAX CUTS COULD HURT S CORPS AND JOINT VENTURES:ABC May 18 opposed provisions in the American Jobs, Closing Tax Loopholes, and Preventing Outsourcing Act(H.R. 4213) that could extend payroll taxes to S corporations and raise taxes on partnership interests transferred when services are performed in order to offset the costs of the 2009 expiring tax extenders. In a letter sent to all members of the U.S. House and Senate, ABC expressed overall support for H.R. 4213, previously known as the Tax Extenders Act of 2009, but strongly opposedthe sections that would essentially shift the cost of the bill onto the business community.
Under one provision in H.R. 4213, any capital investment in an S corporation by an owner would be subject to a new tax. ABC pointed out that few details have been released and Congress has not held a hearing on this amendment – which means a provision limiting the only tool available to S corporation owners to reinvest in their business, and by extension the economy, could be implemented without any discussion from the business community about the impact.
In addition, the bill contains a plan to raise revenue by increasing the taxes on partnership interest transfers, which will affect contractors that enter into joint venture agreements in which they are given a partnership interest in exchange for having provided services to the partnership.
ABC offered its support for other provisions in the bill, including the deduction of state and local sales taxes; the research and development tax credit; and the 15-year straight-line cost recovery for qualified leasehold improvement, qualified restaurant buildings and improvement, especially if it is expanded to include new restaurant construction.
ABC HIGHLIGHTS CONSTRUCTION CONTRACTORS NEED FOR ACCESS TO CAPITAL: ABC May 18 emphasized that increasing access to capital for construction contractors should be a top priority for Congress as they consider ways to improve the nation’s employment situation. ABC’s position was submitted in a letter to members of the House Committee on Financial Services in reference to the committee hearing titled, “Initiatives to Promote Small Business Lending, Jobs and Economic Growth.”
In the letter, addressed to Chairman Rep. Barney Frank (D-Mass.), and Ranking Member Rep. Spencer Bachus (R-Ala.), ABC pointed out that the unemployment rate in the construction industry is at 21.8 percent and many ABC members have viable low-risk projects/contracts that simply need funding in order for work to begin. ABC noted that an increase in small business lending would encourage small construction firms to invest in the economy by hiring additional employees and purchasing new equipment or facilities.
ABC OFFERS BUSINESS DEVELOPMENT WEBINAR: On May 26, ABC will host a webinar titled, “Business Development: Survival Skills for the Recession and Beyond.” The webinar begins at 11 a.m. (ET) and features business development expert Doug Jones, owner, Power BD. During the webinar, Jones will talk about how business owners can take a leadership role in today’s economy to prepare their teams to win business and develop a long-term, successful business strategy. Participants also will learn how to empower employees and how to position their company in the current recession for business growth.
This webinar is designed for contractors and construction professionals, including owners, business development professionals, project managers, executive management, and staff that have direct contact with customers or potential customers. For more information and to register for this event, click here.
FMLA UPDATE:On April 5, the United States Court of Appeals for the Eleventh Circuit issued a decision concerning the FMLA which will have an impact on all construction industry employers in Nebraska. Even though Nebraska is in the geographic area covered by the United States Court of Appeals for the Eighth Circuit, the Eleventh Circuit decision is important to Nebraska because the Eleventh Circuit agreed with the Eighth Circuit on a key issue under the FMLA. In the Eleventh Circuit case, an employee requested leave on a Friday to have foot surgery and found out the following Monday that she had been fired over the weekend. The employee argued that she was terminated because of her request for FMLA leave. The Eleventh Circuit disagreed and noted that the individuals who decided to terminate her did so because of her failure to address issues in her performance improvement plan and because of a situation with a disgruntled customer. In addition, the court noted that the decision makers were unaware of the employee’s request for FMLA leave. However, the Eleventh Circuit agreed with the Eighth Circuit and concluded that even if the decision maker knew about the FMLA leave that “an employee who requests FMLA leave has no greater protection against her employment being terminated for reasons unrelated to an FMLA request than she did before submitting the request.” With this decision, three additional circuit courts have joined the Eighth Circuit in concluding that an employee may be terminated at any time for reasons unrelated to an FMLA request even if an FMLA request is pending. This is good news for construction employers in Nebraska but it also requires construction employers to carefully and thoroughly document performance appraisal issues in order to prove that an FMLA request was not the reason for the termination.
By Bill Harding, Chapter Attorney