North Dakota improves in business tax rankings

North Dakota ranks squarely in the middle of states in a study that compares how each state taxes business. The Tax Foundation review gives much better rankings to neighboring South Dakota and Montana.
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The Washington, D.C.-based organization, which produces an annual report on the business tax climates of states, ranked North Dakota 25th among the 50 states in its most recent survey, after four years of ratings in the low 30s. The foundation's rankings are considered important by legislators and economic development officials.

South Dakota, which has no individual or corporate income tax, was ranked first, while Montana was rated sixth among the 50 states, the survey said. Minnesota's business tax climate was ranked 43rd.

Cory Fong, North Dakota's tax commissioner, said the Legislature helped improve the state's standing by cutting individual income and corporate tax rates and reducing the number of corporate tax brackets from five to three. The Tax Foundation's ratings favor states that impose no income tax at all or that have only a single tax rate, instead of progressively higher rates on larger incomes.

North Dakota's tax system may never attain a top rating because tax collections are spread across income, sales and property, Fong said.

"Having a balanced tax structure is helping us immensely during these difficult times, and I think that is an overall strength that businesses are looking at," Fong said. "We've done a good job of demonstrating ... that having the right level of taxation across those tax types makes some sense."

The foundation's ratings included the 2009 Legislature's across-the-board reduction of state income tax rates, which lowered the top individual income tax rate from 5.54 percent to 4.86 percent, and the lowest rate from 2.1 percent to 1.84 percent of state taxable income.

It did not take into account the Legislature's corporate tax changes, which reduced North Dakota's number of corporate tax brackets from five to three, cut the top tax rate from 6.5 percent to 6.4 percent, and applied the top rate to income greater than $50,000. Previously, the maximum tax rate was assessed against corporate income greater than $30,000.

Nationally, North Dakota has been one of the few states where the state government budget is in surplus. Dustin Gawrylow, director of the North Dakota Taxpayers' Association, an advocacy group based in Bismarck, said the state's rankings improvement should be credited to North Dakota's tax cuts and moves to raise taxes in other states with less robust revenue collections.

"Unlike a lot of states, we're not getting any worse," Gawrylow said.

Gawrylow said North Dakota's rankings when compared to South Dakota, Montana and No. 2-rated Wyoming are more worrisome. North Dakota economic development officials appear to put more emphasis on offering tax incentives to selected businesses than on having lower tax rates on all companies, he said.

"We've got to really look at how we can compete regionally," he said. "We need to look at how we can match Wyoming, South Dakota and Montana on those factors that companies are looking at when they come to North Dakota to look for where to place their factories, or their jobs."

The report analyzes a number of taxes that affect businesses, including income and sales taxes, unemployment insurance rates and property taxes.

On property taxes, which are the subject of frequent complaints by business and home owners alike, the report ranks North Dakota fifth among states, while giving less favorable scores to the state's corporate and individual income tax laws.

Fong said that is where he sees "some fundamental flaws" in how the report depicts North Dakota. "Perhaps the measurements they are focusing on don't necessarily coincide with what people in North Dakota are concerned about," he said.

SBA offer small-business help

Wowwww... They can be sobering statistics for those who are thinking of leaving an employer to start a small business of their own: Nearly one-third of small businesses fail before their second anniversary. And half of them close their doors before their fifth year.

After years of collecting such data, the United States Small Business Administration has learned a lot about what makes some new business thrive while others collapse under the pressures that are so prevalent during the first months and years of operation.

On Tuesdays in October, SBA officials will team up once again with the Suffolk Economic Development Department to share some of those lessons.

The “Start and Grow Your Suffolk Business” seminar series begins Oct 6 and will be held from 6 p.m. to 8 p.m. each Tuesday of the month, with a focus on different topics each week.

This is the fourth or fifth such series in Suffolk, according to Kevin Hughes, the city’s economic development manager, who said some topics change from one series to another.

But some of those topics — like Business Plan Development (Oct. 13) — stay pretty constant because of their value to business owners.

“Obviously, there are some that are very important for every business,” he explained.

Hughes’ department and the SBA consider a solid business plan to be foundational to the success of a new or growing business. In fact, it’s almost impossible to get a loan for a new business without one.

Even so, Hughes said, “You see a lot of startups … who haven’t even done a business plan.”

The two-hour seminar Oct. 13 will cover some of the techniques for writing a winning business plan. It will be led by Jim Carroll of the Small Business Development Center, which specializes in helping small businesses get off the ground.

“It’s a great resource for small businesses, really, at any stage,” Hughes said of the SBDC.

The information that Carroll and other presenters will provide participants is a benefit of the series, Hughes said, but the access to resources like the SBDC is even better.

“Knowing that an organization of people is out there — a lot of them free — that can assist” small business owners can make a huge difference, he said. “The best thing is that we’re able to get those resources in front of people.”

Past seminars have attracted 15 to 25 participants at a time, Hughes said, and they range from the merely curious to the already-established small business owner looking to broaden his awareness of the help that’s available.

“They range from the dreamer to folks who are already up and running,” he said.

Those who would like to participate in the programs are encouraged to call in advance so that organizers can ensure they have enough materials. But Hughes said even walk-ins will be welcome.

The following seminar topics are planned:

4Oct. 6: Do you know how to read and respond to an opportunity with the federal government? This presentation will provide a section-by-section understanding as to what the government asks for in a solicitation. Insights on how to prepare a response to the proposal will be shared.

4Oct. 13: Business Plan Development. Learn about some of the techniques to writing a winning business plan.

4Oct. 20: Pricing to win federal contracts. A follow-up to the first session, focusing on the financial requirements that come along with the pursuit of federal contracts, from the preparation of a cost submission to having the necessary financial resources to invoicing requirements.

4Oct. 27: Finance. Hear what the bank is looking for and the things that impact your loan package. There will be an overview of the Small Business Administration Loan Guaranty Program.

Vectra Bank's small-business index for Colorado rises

The Vectra Bank Colorado Small Business Index for Colorado climbed to 79.8 in August 2009, up from a revised 78.1 in July, mostly because high unemployment rates have expanded the labor pool for employers.

"The last time Colorado's unemployment reached current levels was the spring of 1987, over 22 years ago. There's no question it's a painful time for the state's labor force," said Jeff Thredgold, Vectra Bank Colorado's corporate economist, in a statement.

"The return to employment strength is going to be a slow process. But positive U.S. economic growth expected this quarter should bode well for Colorado moving forward," Thredgold said.

Colorado's unemployment rate was estimated at 7.8 percent in July, up from 7.6 percent in June. August employment data will be reported on Sept. 18.

The index measures business conditions from the viewpoint of the Colorado small business owner or manager. A higher index number is associated with more favorable business conditions for Colorado's small businesses.

The index uses 100.0 for calendar year 1997 as its base year.

Vectra Bank is a unit of Salt Lake City-based Zions Bancorp.

Source: Bizjournals

BUSINESS: Online training course aimed at small businesses

WASHINGTON -- The U.S. Small Business Administration launched a new online training course to help strengthen access to contracting opportunities for small businesses, including those owned by women, minorities, disadvantaged individuals and veterans.

The training course, "Recovery Act Opportunities: How to Win Federal Contracts," is part of a federal government-wide initiative announced last month.

As part of the initiative, federal agency procurement officers are participating in more than 200 events over the next several weeks to help connect small businesses with contracting opportunities.

Additionally, SBA and Commerce are expanding their outreach to contracting officials across the federal government to ensure they have the tools to meet their annual contracting goals and increase opportunities to small businesses, including those owned by veterans, women and minorities, as well as those in designated HUBZones.

As part of the outreach to small businesses, the comprehensive online course uses both audio and script to provide information about the federal marketplace, contract rules and, most importantly, how to sell to the government and where to find contract and Recovery Act opportunities.

The new training portal is a free online training course designed to assist entrepreneurs during this period of economic recovery. This self-paced, instructional guide provides an overview of the federal procurement process.

The Recovery Act Opportunities

2nd UPDATE: Medtronic Consolidate Businesses Into Two Groups

Medical-devices giant Medtronic Inc. (MDT), which has been restructuring amid efforts to control costs and manage pressure on top businesses, said Monday it is moving its various business units into two main groups.

The moves include some changes among Medtronic's top managers, and Medtronic said it's searching outside the company for someone to run a new group covering its cardiology franchises. The other group includes businesses making orthopedic, diabetes, neurology and surgical devices, Medtronic said in a release.

"This new structure enables us to capitalize on existing synergies across our businesses," Chairman and Chief Executive William A. Hawkins said in a statement.

Shares of Medtronic recently traded down 55 cents, or 1.4%, at $38.12, although they've generally been on an upswing since March. The company, which is battling to stabilize its position in markets for key devices amid a slumping economy, has enacted job cuts and other moves in its restructuring efforts this year.

The "CRDM, CardioVascular and Physio-Control" group will contain Medtronic's big cardiac-rhythm business, which includes implantable defibrillators. It will also cover the business that makes stents to open heart arteries and Physio- Control, an external defibrillator business Medtronic would like to spin off once issues raised by the Food and Drug Administration are resolved.

Medtronic said it's currently conducting an external search for someone to run this new group. Segment leaders from the three businesses within the group - Pat Mackin, Scott R. Ward and Brian Webster - will report to that person.

Morgan Stanley analyst David Lewis called Medtronic's decision to search outside the company for this spot the "biggest surprise." Outside perspective has worked before, but the decision to not promote either Mackin or Ward "will come as a surprise to some investors," Lewis said.

"We are not convinced this sends any message regarding the outlook for these businesses," he added.

Christopher J. O'Connell, who had led Medtronic's diabetes franchise, was promoted to head the "Spinal and Biologics, Neuromodulation, Diabetes and Surgical Technologies" group. Catherine Szyman, formerly senior vice president of strategy and innovation, will now run the diabetes business.

Richard E. Kuntz, who had run Medtronic's Neuromodulation business, which includes "deep-brain stimulation" devices used to treat neurological disorders, was named chief scientific clinical and regulatory officer. Tom Tefft, formerly vice president and corporate controller, will take over the neuromodulation unit.

In addition, Jean-Luc Butel was promoted to a new position overseeing international operations.

Last week, the company reported its fiscal first-quarter profit dropped 38%, weighed down by charges from a recent legal deal, but core earnings and sales beat expectations with help from extra time on the fiscal calendar.
Source : cnn