California Tax Officials Look To Decrease Business Startup Costs
On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporationposted in Business Formation & Planning on Wednesday, January 1, 2014.
One of the main things which keeps potential entrepreneurs from taking the step to opening a new business is the startup costs. This can include various supplies and equipment, depending upon the type of business. Also, fees and taxes levied by government agencies can also add to the cost of a business startup. However, tax officials in California have recently taken steps to decrease the startup costs of retail businesses.
The California Board of Equalization (BOE) has recently decided to stop requiring retailers from posting a tax security deposit during their initial three years of operation. Prior to the change in policy, the BOE required corporate entities and limited liability companies to put up deposits which range anywhere from $2,000 to as much as $50,000. This can be a significant cost for a new potential business which could prevent the company from beginning operations which can be stifling to the overall economic growth of the state.
The BOE is also releasing approximately $300 million in deposits previously being held for business owners. This can give companies necessary funds which retailers can now use to purchase new products to sell or even hire new workers. Tax officials have stated that they are hoping this will make it easier for entrepreneurs to startup new businesses.
Many entrepreneurs may see this change in policy as a sign that it is a good time to open a new retail business startup in California. Although the startup costs for a new retail business has decreased, it is still important to follow the correct legal process of creating a business entity. Also, making sure the new company's business plan complies with applicable rules and regulations can prevent future lawsuits.
Source: News 10 ABC, California startup businesses get a $300 million break, No author, Dec. 24, 2013