Software of the Month Club 1996 May/Software of the Month Club 1996 May.iso/mac/ISO9660/ZIPFILES/SBA962.ZIP/F414.SBE

Text File | 1996-02-15 | 17.6 KB | 393 lines

@142 CHAP 11

      ┌───────────────────────────────────────────────────┐
      │   RELATED BOOK ON DOING BUSINESS IN THIS STATE    │
      └───────────────────────────────────────────────────┘

The author of this software program, Michael D. Jenkins,
J.D., CPA, is also the principal author of a book entitled
"STARTING AND OPERATING A BUSINESS IN @STATE."

This book is just one of a series of 51 such books, one for
each of the 50 states, plus a Washington, D.C. edition.
Most of the various editions are co-authored by CPAs with
the accounting firm of Ernst & Young, in the respective
states, or by other local experts -- lawyers, CPAs, business
professors or others -- in each state.

This book series, the only one of its kind, is used through-
out the nation in SBA offices, Small Business Development
Centers, college and university classes, by law and account-
ing firms and other business advisors, and by over a million
small businesses who have purchased copies of this book ser-
ies since the first (California) edition was published in
1981.

INC. MAGAZINE, in a 1994 cover article entitled "In Search
of the Small Business Bible," reviewed several hundred small
business self-help books currently available, and selected
6 as "The Best of the Best." One of the six winners was the
STARTING AND OPERATING A BUSINESS IN ______ series.  The
INC. editors noted that this book series is:

  "...a comprehensive--and truly frightening--catalog of the
   regulations affecting most businesses in your state....
   it's invaluable to have all the information in one place."
   (April, 1994 issue)

Similarly, the New and Small Business Journal (now the
National Small Business Journal) wrote in a 1994 review:

  "Here is a book that can help virtually every small busi-
   ness owner operator.  It has been a best seller in Atlanta
   for many months, and for good reason -- it's loaded with a
   tremendous amount of useful information in a terrific for-
   mat.  And not only is it a nontechnical, 'readable' manual,
   it is about as current as possible...."  (March, 1994 issue)

The National Public Accountant's review concluded that:

   "It is probably the most useful small business self-help
    book available on the market." (Sept. 1994 issue)

This book series, which is found in all major bookstores and
in most discount warehouse clubs, as well, is published by
PSI Research, 300 N. Valley Drive, Grants Pass, OR 97526, at
$24.95 for the paperback version ($29.95 for looseleaf binder
version).  Each is about 275 to 300 pages in length, and in-
cludes important state and federal tax forms, detailed check-
lists, and a number of preprinted "tear-out" postcards, each
of which you can drop into the mail to quickly and easily re-
quest important forms, free booklets and other information
from various state and federal government agencies.

The books series is updated annually, and each of the books
can be ordered by using out the order form that this program
will automatically print out for you, before you exit the
program.

Each of the books (the whole series takes up several feet of
shelf space) goes into far greater detail on most subjects
than this software, and covers a number of areas not ad-
dressed in this program.  We think you'll find the book
edition for your state a very useful addition to your lib-
rary, particularly if you need more in-depth analysis than
we are able to provide in this software.

@CODE: AK CA ID NM OR WA
@CODE:NF
      ┌───────────────────────────────────────────────────┐
      │GENERAL INFORMATION ON DOING BUSINESS IN THIS STATE│
      └───────────────────────────────────────────────────┘
@CODE:OF

@CODE: AK
Alaska, the 49th and by far the largest state, is not only
the last American frontier and an exciting place to live or
visit, for the outdoor enthusiast, but is also a land of
opportunity for the beginning or business owner.  The state
is an almost ideal business location, with few business
taxes, vast natural resources, a strong tourism trade, and
a government that is committed to creating a friendly envir-
onment for business.

There is no state personal income tax, no gross receipts tax,
no state wide property or sales tax, and no inventory tax or
property tax on intangible assets.  About the only taxes a
business needs to face is the corporate income tax, specific
natural resource taxes, and local sales taxes, generally at
rates of 3.5% to 4%, in some cities, such as Juneau, Nome,
Ketchikan, and Homer.

Located strategically on the Pacific Rim, Alaska is well
situated for international trade, which is a growing part
of the state economy.  Anchorage International Airport, one
of the busiest in the U.S., is located almost midway be-
tween New York and Seoul, Bonn and Peking, and London and
Taipei.  With its network of modern highways, railroads and
deep ocean seaports, Alaska has an excellent infrastructure
and is surprisingly accessible.

On the downside, the state has long had a history of alter-
nating boom and bust periods, beginning with the Klondike
Gold Rush in 1898 and the more recent North Slope "Oil Rush"
in recent decades.  At present, the Alaska economy is exper-
iencing some "rough sledding," as both the oil business,
which is undergoing consolidation and downsizing, and the
fishing industry, which is suffering from a potentially
ruinous decline in fisheries, are in a declining, rather
than an expanding mode, the consequences of which are felt
by almost everyone doing business in the state.

Alaska provides a "one-stop" business assistance center,
which provides information about the economy and necessary
steps to initiate a business in the state.  For assistance,
contact the Alaska Division of Economic Development in
Juneau, at [phone].

@CODE:OF
@CODE: CA
California, which has by far the largest population of any
state in the union, with approximately 30 million consumers,
offers an almost boundless market for all types of busines-
ses.  Its highly developed economy is the nation's largest
(and the world's seventh-largest) and is also one of the
most diverse of any state.  For several decades, the words
"California" and "growth" were almost synonymous, and it
was common knowledge that the California economy and the
price of California could never go in any other direction
but up.  That, of course, is history.

Old myths die hard, and those days of unbridled optimism
and growth in California have come to an end, at least for
now; businesses operating in the state that intend to sur-
vive have had to make some painful adjustments in recent
times.  The rapid growth of the economy and population in
the 1980s pushed real estate prices in much of California
to almost unheard-of levels.  But by 1990, property values
finally peaked and began to decline in much of the state
for the first time in many years.

The seemingly endless growth in the California economy has
also stalled in the last few years.  The state has experi-
enced a severe economic contraction as layoffs expanded in
certain key industries--such as construction and defense-
related areas--and as major employers shifted facilities to
other states with lower taxes, fewer environmental problems
and restrictions, and lower housing and living costs.  Un-
like prior national recessions that always seemed to skip
over California, the recent recession was felt in full
force here, even as many formerly stricken parts of the
country, like the Midwest, were making strong recoveries.

A confluence of several factors, including the national ec-
onomic recession, plus defense and aerospace cutbacks, have
added to the woes the state has faced.  The situation was
also exacerbated by a series of back-to-back natural calam-
ities, including the 1989 Bay Area earthquake, a prolonged
drought, a severe and unprecedented freeze in 1990, the
devastating Oakland/Berkeley fire in 1991, the L.A. riots
in 1992, followed by the Malibu firestorm, a virtual deci-
mation of the wine vineyards by disease, and the massive
L.A. earthquake in January of 1994.  This run of misfortune
was capped by the most recent (manmade) disaster, the errant
financial speculation by the Orange County government that
resulted in losses of billions of dollars on its investments
and the filing of bankruptcy by one of the U.S.'s richest
counties.

During this difficult recent period, the business environ-
ment in California was also worsened by an increase in the
top state income tax rate from 9.3% to 11%; a 1.25% in-
crease in the sales tax rate as well as authorization of
local governments to raise local sales tax rates; and dras-
tic increases in alcoholic beverage, cigarette and gasoline
taxes.  These were subsequently offset by an investment tax
credit on purchases of production equipment in most manu-
facturing industries and for new businesses and R&D oper-
ations, as well as several other business tax breaks.

All in all, California has become a difficult place to do
business in recent years, and has witnessed a significant
outmigration of businesses to other western states.  Even so,
the state seems to finally be on the track to recovery, and
finally began to show job growth again in 1994 and 1995, with
the state unemployment rate dropping from nearly 11% at the
start of 1994 to just over 7% by the end of 1995, with
economic growth continuing, although not at a very rapid pace,
in 1996.

In addition, it seems likely that 1996 will see more reduc-
tions in taxes and other steps by state government to make
California a less hostile environment for businesses.  The
Governor, in January, 1996, proposed a 15% tax cut, to be
phased in over three years, although it is questionable
whether the legislature will follow his lead.

Whether or not any further tax incentives are enacted or
any other significant steps will be taken by state government
to make California a less hostile environment for businesses,
California nevertheless remains the quintessential market,
the ultimate place to do business, due to the vast size and
richness of its marketplace.

Despite the sometimes apocalyptic, doom-and-gloom headlines
about the state's demise in recent years, the reports have
been greatly exaggerated (to paraphrase Mark Twain), and
California still has much to offer anyone wishing to start,
relocate, or operate a business.

@CODE:OF
@CODE: ID
Idaho's vast natural resources, including the largest wild-
erness area in the lower 48 states, offer unlimited oppor-
tunities for enjoyment and recreation, and are the basis for
a strong tourism industry.  Long a primarily agricultural
state, Idaho has tied its economic future to high technology
in recent years.  It is one of the five states with the most
rapid growth in manufacturing, and is home to large companies
such as Boise Cascade, Albertson's, and Micron Technology.
Deriving some 3/4 of its electric power from hydroelectric
sources, Idaho has some of the lowest electricity rates in
the nation.  In addition, Idaho businesses enjoy the second
lowest tax burden of any western state, as well as a friendly
regulatory climate and a highly-educated workforce, with the
fourth highest literacy rate in the nation.

@CODE:OF
@CODE: NM
With its pristine, timeless beauty and benign climate, New
Mexico is a uniquely desirable place in which to live, vis-
it, or do business.  Despite being the sixth-fastest-growing
state in the Sun Belt between the 1980 and 1990 censuses, and
its accelerating growth since 1990, New Mexico remains an un-
spoiled "land of enchantment," as every auto license plate in
the state quite accurately proclaims.  Even with its recent
rapid growth (particularly in manufacturing), New Mexico's
relatively small population of about 1.6 million inhabits an
uncrowded state which is the fifth largest in land area in
the United States.

In addition to its delightful, sunny climate, friendly people
and frontier heritage, the state is rapidly becoming a center
for high technology and major research facilities, on the
cutting edge of the new frontiers of science.  Major research
facilities located in New Mexico include:

  . Los Alamos National Laboratories, with about 7,000 wor-
    kers engaged in high-level research focusing on both
    defense-related and nondefense-related programs;

  . White Sands Missile Range, which supports missile de-
    velopment and testing for the military and NASA, along
    with space shuttle testing, Army meteorological re-
    search, and satellite tracking;

  . Albuquerque's Sandia national Laboratories, a subsidiary
    of AT&T Technologies, which has more than 7,000 employees
    engaged in areas such as energy research, weapons devel-
    opment, and particle beam fusion;

  . The Air Force Space Technology Center at Kirtland Air
    Force Base in Albuquerque;

  . The Air Force Weapons Laboratory;

  . The Very Large Array, a large radio astronomy complex
    near Socorro; and

  . Three major universities with research facilities, as
    well as numerous other federal, state, and private
    research and development activities.

New Mexico offers a number of advantages to businesses.  Its
tax environment is highly favorable for some kinds of busi-
nesses -- it has no inventory tax nor unitary system of bus-
iness taxation, and property taxes per capita are 49th in
the nation.  The business climate is very hospitable to new
firms, offering a variety of tax credits and financial in-
centives.  Compared with most states, New Mexico's legal,
tax and regulatory systems are refreshingly simple and
straightforward.

Perhaps the main drawbacks are that New Mexico is a relative-
ly poor state, in terms of per capita income, and the exis-
tence of its pervasive gross receipts tax that, unlike the
sales tax in most other states, applies to almost every type
of business income, including most kinds of revenues from
services.  Thus, for certain service businesses that are
unable to pass the tax along to their customers, the gross
receipts tax can be a serious disincentive.  Furthermore,
this tax on gross income is in IN ADDITION TO the New Mexico
state income taxes on net income of individuals and corpor-
ations.

The state's Office of Enterprise Development, part of the
New Mexico Economic Development Department, maintains a
One-Stop Shop in Santa Fe.  This is not a physical office,
but a computerized electronic bulletin board, which pro-
vides various types of data on state regulations, statis-
tics, industrial parks, business assistance, and small
business information.  It can be accessed by modem 24 hours
a day at the following phone numbers:

  .  [phone] (in Santa Fe)

  .  [phone] (toll-free from elsewhere in the state)

@CODE:OF
@CODE: OR
Oregon, once known primarily as a timber and forest products
state, is now emerging as a leader in manufacturing, high
technology, and tourism, with a vibrant and diversified
economy.  In addition to its beautiful natural environment,
with snow-capped Cascade peaks, lush valleys and forests, and
spectacular Pacific Ocean coastline, Oregon provides an ex-
cellent environment for businesses, particularly for new and
small businesses, many of which have migrated to the state
from California in recent years.

Business-friendly features include:

  . No state wide sales tax

  . No business and occupation tax

  . No tax on intangible property

  . No recordation or real estate transfer taxes

  . No property tax on business inventories, or on livestock
    or farm machinery

  . A one-stop business assistance center, offering assis-
    tance to businesses commencing operations in the state
    (Oregon Economic Development Corporation, Salem, OR:
    Telephone [phone])

@CODE:OF
@CODE: WA
The fast-growing state of Washington has proved attractive
to entrepreneurs starting new businesses or acquiring exis-
ting businesses.  It is known worldwide as the home of two
of the world's most dominant and most highly respected tech-
nological enterprises, the Boeing Company and Microsoft.
But its strong development record and favorable economic
outlook are attributable to a number of factors, including:

  . A strong base of technology, related to its major
    position in the aerospace, software, medical, biotech,
    and nuclear power industries;

  . A broad resource base consisting of forests, agriculture,
    some of the nation's most important fisheries, and
    minerals, as well as abundant water for diversified
    production, agriculture, and energy generation;

  . A highly trained and industrious workforce;

  . A topnotch state higher education system with two public
    research universities, 17 other four-year colleges and
    universities, and 27 community colleges;

  . A diverse, highly developed transportation system, in-
    cluding a public transit system in the Seattle area that
    is widely regarded as the nation's best run public tran-
    sit operation;

  . A state government seeking to accelerate state economic
    development, and a business culture accustomed to suc-
    cessfully dealing on an international level.

While the state has relatively high tax rates overall, it
imposes no income tax on individuals or businesses (although
it does impose Business and Occupations on gross income of
all businesses that, in some cases, may be more burdensome
than a tax on net income would be.)

Washington provides help to businesses seeking to start or
locate in the state through, the Business Assistance Center,
part of the Washington Department of Economic Development,
which can be reached at 1-800-237-1233.

@CODE:OF