New year will bring new laws and regulations for small business


Small-business owners will be greeted Jan. 1 with dozens of new laws and regulations.

In California, they will include new mandates concerning employees, including a partial ban on checking the credit reports of workers and job applicants.

And it’s no surprise that there are changes at the federal level too.

Here’s a guide to some of the new laws and regulations set to go into effect in 2012.

Federal taxes

As of January, there will be a major decrease in how much of the total cost of new equipment — including items such as computers, machinery and vehicles — a business can deduct upfront on its tax return.


That deduction, which had been boosted by federal stimulus bills, will drop to $125,000 from $500,000. And unless there is a change in the law, the deduction will drop further to $25,000 in 2013.

Also, the Internal Revenue Service will have a new tool to catch businesses that don’t report all their sales income. In 2012, the tax agency will require credit card processing companies and third-party payment services, such as PayPal, to report how much money they handle for merchants.

This doesn’t apply to small operations. The new rule is in effect for businesses that process more than $20,000 in payments in a year and have more than 200 transactions.

This rule could have its biggest effect on online sellers.

“It’s going to be a surprise to people who have small businesses on the Internet that have probably not been reporting anything at all,” said Lynn Freer, president of Spidell Publishing Inc. in Anaheim, which publishes Spidell’s California Taxletter.

Accessibility rules

The Justice Department announced in 2010 new rules for how the 1990 Americans With Disabilities Act is to be implemented. Some go into effect March 15.


For example, under the original standards, one van-accessible parking space was required for every eight accessible parking spaces. The new rule calls for one for every six spaces. In general, however, a business complying with the former rules will not have to redo the parking spaces to conform to the 2010 standards.

Another new rule requires new or altered buildings to have light switches and thermostats mounted 48 inches above the floor. The old rule was 54 inches.

Hotels and motels of all sizes will be required by new regulations to provide more specific details on accessible and inaccessible features in their rooms. And they will have to hold all the accessible guest rooms until all other rooms of the same type — for example, those with two-double beds — have been reserved.

This has met with some opposition from the hotel industry.

“Once you start chopping up the room types for these particular customers you will have some more vacant rooms because of how the puzzle works,” said John Manderfeld, president of the California Lodging Industry Assn.

There are also new standards for swimming pools, bowling alleys and other locales. Small businesses may qualify for a tax credit to help cover the costs of compliance.

California laws


As of January, employers will be banned from checking the credit of non-managerial employees and job applicants. There are some exceptions, including employees who handle confidential information.

Businesses will be required to provide new hires with additional, more detailed information about their pay and other matters, such as contact information for the workers’ compensation insurance carrier.

For companies that want to include social benefits in their missions, there will be a new type of corporate structure. These firms, called B corporations (the “B” is for Benefit) that don’t make decisions solely based on profit, will be more protected from shareholder suits.

And a new law boosts the penalty for misclassifying an employee as an independent contractor — a hot-button issue in California.

All in all, the new rules — whether state or federal — are not welcomed by many small business owners, especially if they add paperwork and scrutiny.

“Controls are important, but [regulators] made it impossible for us,” said Joanne Weinoe, owner of Golden State Magnetic & Penetrant Lab Inc. in Arleta. “At what point do they not realize we are the ones keeping everything going?”