PROPOSED STATE OF ILLINOIS RULES AFFECTING SMALL BUSINESS

Following are proposed rules of possible interest to small businesses published in the February 16, 2007 Illinois Register. During the 45-day comment period, individuals have an opportunity to express their support or opposition to the rule. To submit comments or to learn more about the proposed rules, contact Katy Khayyat at the Department of Commerce and Economic Opportunity Entrepreneurship Network Information Center via e-mail at Katy.Khayyat@Illinois.gov or call (800) 252-2923 or (217) 785-8020.

This newsletter is now available online. To read the online version, go tohttps://oswego.responsive.us/exchweb/bin/redir.asp?URL=http://www.ienconnect.com/regflex.

The following proposed regulation will impact fireworks manufacturers, wholesalers, and retailers; municipal governments, and businesses desiring to conduct fireworks displays:

The Office of the State Fire Marshal proposed new Parts titled “Pyrotechnic Distributor and Operator Licensing Rules” (41 Ill. Adm. Code 230; 31 Ill. Reg. 2795) and “Pyrotechnic and Consumer Display Permitting Rules” (41 Ill. Adm. Code 235; 31 Ill Reg. 2830). These rulemakings were originally adopted as emergency rules, effective 1/23/06, but they both expired on 6/21/06. Parts 230 applies to all individuals who distribute “display fireworks”, conduct “pyrotechnic displays”, or are responsible for the safety, setup, discharge, and supervision of a pyrotechnic display. All pyrotechnic displays must be permitted by the appropriate local governmental authority and use the services of a licensed pyrotechnic distributor and also a licensed lead operator, who must be present and supervise any display. The display site must be inspected by the local fire chief. Covered topics include nationally accepted display standards, licensure qualifications, criminal background checks, fees, licensure examinations, and license renewals. Recordkeeping and disciplinary actions are also specified. Part 235 outlines permitting procedures for pyrotechnic and “flame effect” displays in an indoor setting. The rules also address “consumer fireworks” which are classified by the federal government but do not include items such as sparklers, caps, snakes, or glow worms. Both pyrotechnic displays and consumer fireworks displays require a local permit. OSFM will appoint a 5-member review committee to decide, on an annual basis, which consumer fireworks maybe distributed and sold in Illinois. Other covered topics include recordkeeping and reports of fire, injury, or property damage.

Bottom Line: The issues involved are the proper licensing of professional and consumer operators to conduct pyrotechnic displays and flame effect display in an outdoor setting in a safe manner so there is no danger to the audience attending the event. The subjects involved are the use of explosives and flammable gases in pyrotechnic displays of a theatrical nature in an outdoor setting. For further information contact Misty Matykiewicz at (217) 558-0639.

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The following regulation will impact businesses that want to register as a corporation:

The Secretary of State proposed amendments to rules titled “Business Corporation Act” (14 Ill. Adm. Code 150; 31 Ill. Reg. 2867) to eliminate qualifying elements in determining whether a corporate name is distinguishable, leaving the determination at the discretion of the Secretary or the Secretary’s designee. Elements employed in determining similar corporate names that are deemed not distinguishable (e.g., an abbreviation versus the full spelling of a word; a misspelling of a word; phonetic spelling) are eliminated. Also, procedures for filing an amended annual report are prescribed. The rulemaking specifies that all amounts transferred from a corporation’s retained earnings or any other entry in its stockholder’s equity to its paid–in capital are subject to franchise taxes imposed by the Business Corporation Act, and at no time shall the paid-in capital of a corporation be reduced to an amount less than the consideration received for the remaining issued shares. A parent corporation being merged into a subsidiary must demonstrate by competent evidence to the Department what the history of financial transactions is between the parent and Subsidiary Corporation. Late document filings of a corporation will not trigger financial penalties if a filing is corrected and returned within 30 days to the Secretary. Any other waiver of penalties must be documented by the Director of Business Services.

Bottom Line: The new sections provide rules for amending a previously filed annual report, for subjecting all transfers to a corporation’s paid-in capital to the franchise taxes imposed by the Business Corporation Act, and establishes rules for any waiver of penalty. For further information, contact Robert Durchholz, Department of Business Services at (217) 782-4909.

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The following regulation will impact business that want to register as a LLC:

The Secretary of State proposed amendments to SOS rules titled “Limited Liability Company Act “ (14 Ill. Adm. Code 178; 31 Ill. Reg. 2882) concern what is a “distinguishable” limited liability company name. Qualifying terms (e.g., a “substantial” similarity to a name on record or containing a "significant" difference or whose distinguishability is “plainly” recognizable) are eliminated. The rulemaking adds corporate names to factors that are considered by the SOS Department of Business Services in determining whether a name is available, but the names of corporations not on record with the Department are not considered. Minor distinctions in names currently deemed as inconsequential for the purpose of permitting a company to obtain a name are eliminated (e.g., spacing of words, phonetic spellings, an abbreviation or different tense of a word, conjunctions).

Bottom Line: Limited liability companies, most of which are small businesses, will have an expanded field of available names. For more information, contact Robert Durchholz, Department of Business Services at (217) 782-4909.

2007 IEC Energy Solutions Workshops for Small and Medium-Sized Business

The 2007 IEC Energy Solutions Workshops will be held March 14 at Miliken University in Decatur, IL and March 15 at Rend Lake College in Ina, IL. This workshop is for small and medium businesses, Ag producers and rural businesses, commercial building contractors and more. Learn about opportunities to save energy and lower operating costs through this information-packed workshop. Topics include business energy resources, including free audits, top efficiency recommendations and more. Learn about financial resources such as state loans, USDA grants, and loans for energy efficiency and renewable energy projects; assistance from the Smart Energy Design Assistance Center (SEDAC); EPACT 05 and tax incentives for energy efficiency improvements; and the buzz about green buildings. For more information call (217) 546-6815 or email info@IECouncil.org.

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Employer Credit of up to $600 for Hiring Veterans

Employers will receive a tax credit of up to $600 for each veteran hired. The State of Illinois is promoting the hiring of the state’s military heroes with a new tax incentive for businesses. Employers can now earn income tax credit of up to $600 for every qualified veteran they hire. Beginning tax year 2007, Illinois employers can earn tax credits for hiring veterans who have recently been on active duty overseas. Employers can earn the new Veteran’s Tax Credit of 5% of total wages paid, up to a maximum of $600 annually for wages paid to each veteran hired after January 1, 2007. The veteran must work at least 185 days during the tax year for the employer to qualify. The credit is available for veterans who were members of the Armed Forces, the Armed Force reserves, or the Illinois National Guard on active duty in Operation Desert Storm, Operation Enduring Freedom or Operation Iraqi Freedom. For more information go to: https://oswego.responsive.us/exchweb/bin/redir.asp?URL=http://www.state.il.us/agency/dva/.

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2007 Environmental Workshop for the Construction & Demolition Industry and Building Code Officials

NOTE: Licensed Real Estate Professionals will receive 6 hrs elective CEU credit and should contact their local Illinois Association of Realtors Chapter to register. In addition, licensed home inspectors will receive 3 hrs elective CEU and can register directly with DCEO.

The Department of Commerce and Economic Opportunity, Small Business Environmental Assistance Program along withthe Illinois EPA, Department of Public Health, Emergency Management Agency, Department of Natural Resources andnumerous industry co-sponsors will be holdingworkshops around the state to educate the construction industry andother related industriesabout requirements for asbestos, lead,radon, mold,floodplains, endangered species and safety and health.In addition, participants will learn aboutenergy efficient building andenergy programs. Commercial & Residential Contractors, Demolition Contractors,Realtors, Property Managers, Building Maintenance Providers, Home Inspectors, Local Building& ZoningOfficials & Inspectors are urged to attend. A $35 nonrefundable fee will be chargedto cover meal expenses. Workshops will be held from 8:30-4:30 on the following dates and locations:

February 28, 2007 Stoney Creek Inn--Moline

For more information or toregister andsubmit payment on-linevisit https://oswego.responsive.us/exchweb/bin/redir.asp?URL=http://www.ienconnect.com/enviro%C2%A0%2520If. If you have questions, please contact the Illinois Small Business Environmental Assistance Helpline at 800/252-3998, or send an e-mail todceo.sbeap@illinois.gov.

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2007 Tax Calendar Now Available

The 2007 Small Business Tax Calendar is now available. It contains information, reminders and important dates to help you comply with federal tax obligations. Order copies fro IRS.gov, or access an online version at: https://oswego.responsive.us/exchweb/bin/redir.asp?URL=http://www.irs.gov/businesses/small/article/0,,id=104682,00.html.

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New State Sales Tax Calculator Debuts on IRS.gov

The Internal Revenue Service is providing a new online tool to help individual taxpayers determine whether they might benefit by electing to deduct their state and local general sales taxes. “The Sales Tax Calculator is another interactive tool on the IRS.gov web site designed to help make it easier for taxpayers to figure their taxes,” said IRS Commissioner Mark W. Everson.

Taxpayers who itemize deductions on Schedule A of the Form 1040 in 2006 have the option of deducting the amount of state and local sales taxes paid instead of deducting their state and local income taxes paid. Taxpayers cannot take a deduction for both sales and income taxes.

New tax law enacted in late December reinstated the optional deduction for state and local sales taxes. Because of this late enactment date, the IRS previously announced that it would not begin processing returns claiming the sales tax deduction until Feb. 3. To use the Sales Tax Calculator, taxpayers input their adjusted gross income, number of exemptions and zip code. The IRS estimates most taxpayers will get an answer in less than five minutes using the new tool.

The calculator is anonymous. Taxpayers do not need to enter their name, Social Security number or any other identifying information. The calculator is another in a series of steps the IRS is taking to reduce taxpayer burden.

As an alternate to the online sales tax calculator, taxpayers can use the worksheet in Publication 600, State and Local General Sales Tax, posted on IRS.gov and mailed in early January to about six million individuals who received the Form 1040 tax package.

To calculate what their sales tax deduction would be, taxpayers can use either the actual amounts paid or use sales tax tables that allow them to factor in the exact sales taxes paid on certain specified items, such as a car, boat or material to build a house.