The Oregon Biz Report - Business News from Oregon

From U.S. Bureau of Economic Analysis

By the Internal Revenue Service,

If you are donating to charities providing earthquake relief in Haiti, you may be able to claim those donations on your 2009 tax return. Here are 10 important facts the Internal Revenue Service wants you to know about this special provision.

1. A new law allows you to claim donations for Haitian relief on your 2009 tax return, which you will be filing this year.

2. The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti.

3. To be eligible for a deduction on the 2009 tax return, donations must be made after Jan. 11, 2010 and before March 1, 2010.

By Patrick Emerson
Oregon Economics Blog

Gubernatorial candidate Bill Bradbury has come out with a proposal to create a “Bank of Oregon” where all state agencies would be required to deposit their funds. Then the bank would be required to invest only in in-state projects. It is an interesting idea, modeled on a similar bank in North Dakota that has been aroundn for 90 years.

The populism of the idea is clear, ‘boo, big multinational corporate banks!,’ but is it a good idea?

Well, it is hard to say. It seems to rest on the premise that worthy in-state ventures cannot get access to capital. This is not hard to believe is true to some extent at the moment, but putting aside a once-in-a-lifetime credit market collapse, is this an accurate premise in general? I am not convinced.

Flash Cookie changes how marketers can track users online
By Oregon Small Business Association,

Marketers have a fresh, new tracking tool to follow you online and it’s tougher to beat.  In the past, the best way to preserve online anonymity is to delete your cookies, the bits of computer code embedded in Web browsers that remember the sites you visit and is a pinpoint marketing tool for business. Each action you take online draws a sharper and more useful profile of you. In the past, this crumb trail is erased by simply going to a browser’s “Tools” menu and clicking “clear recent history” or “delete cookies”.  Meet the “Flash cookie.”  With “Flash cookie” this is no longer the case. It acts like a hard drive, storing data online and not on the browser, so it won’t be erased when consumers clear cookies.

The Federal Trade Commission isn’t amused. Chairman Jon Leibowitz is contemplating rules that would penalize companies that track consumers without consent or adequate transparency. His rationale: If people delete cookies, there’s a reason. Congress may also step in. Rep. Rick Boucher (D–Va.) is writing a bill requiring companies to notify users about online cookies and ad targeting.

NW Business Litigation Blog
Ater Wynne
Oregon Attorneys at Law

Washington’s domestic partnership law, which went into effect on December 3, 2009, provides that for all purposes, registered domestic partners must be treated the same as married spouses, unless doing so would conflict with state law.  “Registered domestic partners” include same-sex domestic partners, and also opposite-sex domestic partners, provided one of them is at least 62 years old.

For employers, this means that employment-related benefits must be extended to the registered domestic partners of employees on the same basis as spouses — that is, unless the benefit is governed exclusively by federal law.  FMLA is one such law; ERISA is another.  This means that employers subject to FMLA and the corresponding state leave laws (the Washington Family Leave Act,  state pregnancy disability laws, and state military leave laws) cannot count against an employee’s annual FMLA entitlement any leave that is covered by state law but not FMLA. 

By Bill Conerly,
Conerly Consulting, Businomics,

Some say that we have added no jobs in the past 10 years, and they are calling it a “lost decade.”  What they see is a product of bad data analysis.  Here’s the actual U.S. employment data, plotted in blue:

State tax agency asks you to wait until after special election to file 2009 tax returns
Oregon Department of Revenue,

SALEM—If you’re in a hurry to file your tax return, the Oregon Department of Revenue asks you to hold on to it until after the January 26 special election.  “If people file before the special election, we’ll hold their returns until we know the election results. But we’d rather everyone wait to file,” said Theresa Schuh, personal income tax policy manager.  The agency doesn’t usually start processing tax returns until mid to late January, anyway, she said.

Even though tax return processing will start a few days later this year, most taxpayers who file electronically will get their refunds five to 10 days after their returns are processed.  “If you e-file your tax return on February 1, you could have your refund by February 8,” she said.

By Aaron Crowley,
Oregon business owner and author of Less Chaos, More Cash

My good friend Scott called me the other day and he was shouting, “I shouldn’t have to explain this!  It goes without saying!”   You see, he recently started a small business, detailing luxury cars, and he had just received a nasty call from a customer who was less than pleased to find a French Fry on the floor of his Mercedes after spending $350 to have it cleaned.  It was the first car, his very first employee, had ever cleaned. Scott, like so many small business owners, had made a very common assumption: He believed that washing and waxing expensive automobiles was a labor of intense love that is done with great care by everyone, most especially his new employee.   Accordingly, he sent his very first employee off to his very first detail job with few instructions other than, “Make sure you get a check.”

He made what I like to call the Deadly Assumption(TM) – which is the belief that some work is so basic, fundamental, and obviously important that it need not be explained…which explained his shouting, “I shouldn’t have to explain this!”

DeFazio Introduces Transaction Tax
By Oregon Small Business Association,

Oregon Representative Peter DeFazio and others in Congress are pushing a new concept that would fund spending programs by taxing securities and derivative transactions.  Supporters argue that H.R. 4191, Let Wall Street Pay for the Restoration of Main Street Act of 2009, which would implement a 0.25% transactions tax, will raise revenue without impacting the average investor.  The concept is that the tax is needed to ensure that Wall Street pays for their share of the needed investments.  Opposition states that the bill has many underlying problems and loopholes which would lead to an even worse economic decline.

Below are the pros and cons of the transaction tax

By Louis A. Ferreira
Stoel Rives LLP, Attorneys at Law
Congress has proposed legislation that would amend the Occupational Safety and Health Act of 1970 to increase both civil and criminal penalties, expand coverage, and create new obligations for employers. Congress has not acted recently on the bill, named the “Protecting America’s Workers Act,” but employers should expect action sometime in the new year.

Willful violations of OSHA that result in the death of a worker would be a felony punishable by up to 10 years in prison, while willful violations resulting in serious bodily injury would be a felony punishable by up to five years in prison. Currently, the criminal penalty for a willful violations resulting in death is imprisonment for 1 year. There is no criminal penalty under the existing act for a serious bodily injury resulting from a willful violation. In addition, the maximum civil penalties in all OSHA violation categories would increase, and would be adjusted periodically according to the Consumer Price Index.

Do temporary cuts in public education spending affect outcomes?
By Dr. Eric Fuits,
EconInternational

As Oregonians mull their ballots for Measures 66 and 67, proponents remind them of the Doonesbury year.  The year was 2003 and Oregonians overwhelmingly rejected an increase in income taxes to fund what legislators call “vital services,” namely K–12 education. That year and the next, many Oregon schools cut spending. The result was a temporary increase in class sizes in some schools.  The Doonesbury comic strip picked up on the theme and ran a week-long series highlighting Oregon’s situation.

Tax proponents were insulted, fearing that Oregon had become a “laughing stock.”  Other’s were more sanguine.  One school obtained a signed copy of one of the strips and auctioned it at a school fund raiser.  When life gives you lemons, make lemonade.

By Oregon Tax News,

New regulations, taxes, and fees and even some interesting new tax credits may be in store for this year.  Federal agencies and Congress will consider numerous policy proposals that will increase regulatory action, increase taxation, and even provide a tax breaks.  Currently, dogs, cats, and other household pets are the winners while tax consultants and tanners are the losers.

The Internal Revenue Service (IRS) is looking at increasing regulations on tax preparers by 2011.  According to the IRS, approximately 60 % of taxpayers have someone handle their taxes for them.  “This is something that is long overdue,” IRS Commissioner Doug Schulman said, adding that there are “no national, professional standards for one of the largest financial transactions individuals have each year.” 

By Bill Conerly,
Conerly Consulting, Businomics,

I always loved listening to Johnny Paycheck sing Take This Job and Shove It.  Now some workers are actually saying that.  Here’s the number of quits in the entire economy:

Quits are still well down from the boom days, but the latest news suggests that there will be more to come.  In the recession, managers can get sloppy without losing workers.  It’s not that the managers are inherently bad (most of them, anyway), but that they became preoccupied with cash flow and business survival.  The often did not recognize that their staff were stressed out, worried, and maybe angry and resentful.

By Jane Dickson,
Regional general manager for managed partners in Microsoft’s Small and Mid-market Solutions and Partners (SMS&P) group

Most of us are conditioned to perform certain safety routines whenever we leave our homes and our automobiles. We lock the doors and windows and make sure valuables aren’t sitting out, visible to passersby.  Transferring these instincts to the world of cybercrime, though, doesn’t always come as naturally. For many business owners, staying up-to-speed on the latest digital security threats isn’t instinctive and can get put on the back burner in deference to other business priorities.

The good news is that you have many free resources available to help you easily navigate the ever-evolving world of cybercrime. One is Microsoft’s Security Intelligence Report, a bi-annual comprehensive update of technology threats designed to keep your business’ digital data safe.

Worm infections on the rise

By Tom Quaadman
US Chamber of Commerce
Join US Chamber

Following his State of American Business address, Tom Donohue mentioned at a press conference that protectionist policies and tax increases transformed a severe recession into the Great Depression. Is history repeating itself?

Well, we have a severe recession. The failure to enact trade agreements, like the one with South Korea, I will leave for other to opine on. However, the administration is poised to propose one new tax on banks, while others in Congress are pushing a tax on stock transactions. The reasons for these tax increases are to raise revenue, curb risky bank practices and stop excessive trading of stocks.

By Tim Duy,
Oregon Economic Forum
University of Oregon Index of Economic Indicators.
sponsor, KeyBank.

The University of Oregon Index of Economic Indicators™ rose 1.0 percent in November to 85.8 (1997=100) from an October figure of 85.0.  The UO Index has risen for four consecutive months and, compared to six months ago, the UO Index is up an annualized 2.1%.  These patterns are consistent with expanding economic activity; the Oregon economy exited recession in the fall of 2009.

Highlights of the report include:

•    Labor market improvement remains elusive. Initial jobless claims edged downward, but have been relatively constant for four months at a level consistent with ongoing job losses.  Likewise, payrolls in the employment services sector remain flat, in comparison to the gains that would be expected to precede broader improvement in the labor market.  The slow response of new hiring as the economy gains strength is consistent with concerns of a “jobless” recovery, one in which growth remains insufficient to trigger significant employment gains.

Accidental Entrepreneurs: While Business Licenses Increase, State Decreases Portland’s Entrepreneurship Training
By Martin Medeiros,
Partner, Swider Medeiros Haver LLP

In addition to increased middle market merger and acquisition activity, caused most likely by value or strategic acquisitions, business entity formations are up.  This shallow increase in transaction and formation volume may initially seem odd in a deep recession.  But it may be the logical result of a conscientious move of individuals and small businesses to attain basic legal protections.

By Bill Conerly, Conerly Consulting, Businomics,

An interested reader asks, “One question I would like to ask is whether you see the US ever fully recovering from this recession?”

Good question.  In the common sense of the term, yes we’ll fully recover.  The level of economic activity will fully recover all lost ground, and then hit new record highs.  No problem.  Let’s take a look at the long-run history:

By Dr. Eric Fruits
Econinternational

The business press and investment advisers have declared this year to be the Year of the Roth IRA.

Roth IRA: “One of the best deals in retirement planning”.  With a Roth IRA, virtually all income growth and withdrawals are tax-free.  Because retirees don’t pay taxes on their withdrawals, the Roth IRA has been called one of the best deals in retirement planning.

With the turn of the New Year, the income limits that have prevented many individuals from converting a traditional IRA or employer-sponsored retirement plan to a Roth have been eliminated.   The loosening of the rules is particularly well-timed for a period when workers are losing their jobs and are no longer employed with the company that holds their retirement account.