In need of tax relief?
By Cynthia E. Griffin
Think Uncle Sam never gives you a break? Think again: The 1999 fiscal-year federal budget includes several provisions that offer entrepreneurs tax relief.
If you sell products or services over the Internet, the Internet Freedom Act ensures you won't have to worry about new state or local taxes for three years. Under the act, local governments that have not already done so are prohibited from imposing an Internet access tax, nor can they levy "discriminatory taxes" on transactions that are not similarly taxed in non-Internet commerce. This means, for example, that if you sell products in multiple states and are not currently taxed by the states into which you sell, new taxes cannot be passed.
- Other provisions in the budget include:
- Giving small-business owners an additional year to deduct research and development costs. The tax credit has been extended until June 30, 1999.
- Allowing self-employed workers to fully deduct health insurance premiums for themselves and their families in 2003 instead of 2007. The acceleration also changes the level of deductibility for other years. Now you can deduct 60 percent of the cost from 1999 to 2001, and 70 percent in 2002.
- Extending the tax credit for hiring hard-to-place low-income people under the Work Opportunity and Welfare-to-Work programs. This deduction was scheduled to end in April but has been extended through June 1999.