Your Wish Is Granted

Reversal Of Fortune

By Janean Chun

Among the sweet victories in the federal government's balanced budget deal was a particularly tasty portion for homebased business owners. One of the provisions overturned the Supreme Court's Soliman decision of almost two years ago, restoring the home office deduction for business owners who perform daily administrative or management functions in their homes. Though the deduction won't actually kick in until December 31, 1998, Rep. Jim Talent (R-MO), chair of the House Small Business Committee, called its inclusion in the budget a victory for homebased business owners. "[This budget] is part of the changing approach of government," he says. "We've been saying we're going to reward ingenuity, and then we turn around and have tax laws that penalize [homebased business owners]. But this law changes that. The message we're trying to send is one of support rather than one of suspicion."

Not that the hypocrisy has evaporated--it's just starting to work to homebased business owners' advantage. "Several years ago, we wouldn't have gotten these little changes," says Talent. "But I think people are sensitized to it now, and a lot of that is due to the lobbying of small business. By the end of it, I think everybody was not only willing to put [the provision] in, but they all wanted to boast about how important they thought it was. That really shows you we won the debate as well as the legislative battle."

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