“Small business is the gateway to opportunity for those who want a piece to the American Dream” -President Ronald Reagan. This is a quote I take to heart as a former California business owner myself.
California entrepreneurs have started their businesses in humble places from kitchen tables to garages. Well-known companies such as Apple, Google, Hewlett-Packard, Maglite, and Mattel are only a few companies that began in a garage in California and now employ thousands.
However, nearly 25% of all new businesses fail within their first year. Nearly 50% fail by their fourth year. It is important to help those individuals who pursue their dreams and start a company with modest means. That is why I introduced Senate Bill 641 (SB 641), which would benefit more than 39,000 small businesses in California.
Current law unfairly forces a business that loses money, or breaks even, to pay a mandatory minimum annual franchise tax of $800. This amount could be the tipping point for a struggling new business owner that forces them to shut down.
SB 641 provides start-up businesses that make less than $10,000 per year the opportunity to reinvest in their futures by eliminating the mandatory annual franchise tax for their first four non-profitable years.
I have heard from local entrepreneurs in my district that have struggled to pay this mandatory minimum tax.
Entrepreneur and Menifee resident Joanna Olsen traveled all over the world for consulting firm Accenture, before she retired and started her own firm, Olsen Global Consulting, LLC. She consults companies on how to improve customer relationships and build their sales productivity.
Joanna understands what it takes to build a successful business. Olsen Global Consulting just needs time and a nurturing environment in order to thrive, then it could be the next big company that employs thousands of Southwest Riverside residents.
However, like many small businesses in California, Joanna Olsen must pay the mandatory minimum $800 franchise tax. As a start-up, Joanna said this is a serious burden for her and for the thousands of California businesses like hers.
Senate Bill 641 will allow a fragile new business to flourish without the strain of a state government working against them, and it will encourage more California residents to follow their dreams.
Please join my team by sending me an email of support for this important bill to senator.anderson@senate.ca.gov. Together, we can help grow small businesses in this state and give the dreamers who start them the support and admiration they deserve.
Senator Joel Anderson represents parts of San Diego and Riverside Counties in the 36th District in the California State Senate.