California Steamin'

By Janean Chun

Inflamed lobbyists, defensive government officials, a handful of serious misunderstandings--everything's present and accounted for in the controversy surrounding California Assembly Bill 701, which passed the state legislature in September. Debra Schacher, chairman and CEO of the Home Office and Business Opportunities Association, calls the bill "a witch hunt," while Tim Lynch, deputy controller for the city of Los Angeles, says it's "a very minor type of housekeeping thing."

The red tape started sticking this summer in Los Angeles, when the city at long last updated its zoning ordinances to legalize homebased businesses. However, the victory came with a sharp edge: Any homebased business that registers after the amnesty period that ended in September can be back-taxed from November 1996 forward. By the city clerk's calculations, approximately 5,800 of Los Angeles' estimated 20,000 homebased business owners made the cut-off date.

Just as the uproar started brewing, the California Assembly Bill began picking up steam. The bill allows the state to provide city officers with names, addresses, Social Security or taxpayer identification numbers, and business activity codes of anyone paying state taxes. Some homebased business advocates started smelling a conspiracy.

The California bill, says Schacher, empowers the city of Los Angeles to go forward with its plans to identify Los Angeles' homebased businesses through tax records without the knowledge of the business owner.

Lynch claims the bill and the Los Angeles zoning ordinance are not connected. "I can understand that for someone who is working quietly in his home, this looks as if all of a sudden we're ganging up on him," says Lynch. "But [the bill and the zoning ordinance] just happened to coincide in the summer of 1997."

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