I often find that when I set pen to paper to write these weekly communications, it’s to scold one level of government or another for creating another new regulation that makes it harder or more expensive for businesses to create jobs and grow the economy. Imagine my joy when my first The Business Perspective of 2014 is to call attention to a positive action by a powerful yet not highly visible part of our state government. Today, I write in praise of the California Board of Equalization.
For years, California has required any business wanting to take out a sellers permit to provide a security deposit equaling half a year’s worth of taxes to the Board of Equalization. The deposits ranged from $2,000-$50,000 per company and currently the state holds $300 million of these deposits from more than 15,000 companies. This regulation has been unique to California and an unnecessary obstacle to entrepreneurs who want to start a small business in California.
You will notice I have been discussing this regulation in the past tense, because the Board of Equalization, in one of its last acts of 2013, voted to end the requirement for security deposits. With this simple, common sense action, our state government has sent a message that it wants Californians to take the leap to start their own business. Removing this requirement allows these resources to be dedicated to growing a business instead of sitting in a government bank account.
On behalf of business owners throughout California, we thank the Board of Equalization for doing the right thing for California and our economy. We hope that this is just the start of smart legislation and regulatory reform by government at all levels during 2014 to seek out and eliminate unnecessary regulations that stand in the way of job creation.
If we follow this lead throughout California during 2014, we will no longer have one of the highest unemployment rates in the nation on Jan. 1, 2015.