No doubt there are opportunistic lawyers and misguided public officials that are doing everything in their power to screw things up. But, I think those are actually the minority. The barriers to entry that small businesses face have been established by the large corporate interests who have co-opted government for their purposes.
I agree, but it is a chilling effect. Over-cautiousness, or does a company with 1000 companies really get into 10x$1M worth of lawsuits per year. Its like patent/trademark protection. You can spent huge money on lawyers to stake your claim, but when someone infringes, guess who has to foot the bill. There is a gross trademark infringement in one of the rotating ads on this very site, but how do you prove in a court of law what your actual loss of revenue was? Without being able to claim damages, you are just paying lawyers to send letters. If someone does really run with your patent, it is the same problem. The settlement ends-up being that they have bought your company based on what it was making at the time/documented sales growth, and they get to keep the real sales growth.
one more reason not to hire from wall street journal 06132011 If you let employees telecommute from out of state, you may face tax trouble. Journal Report Read the complete Small Business report. Matthew Bobman, a certified public accountant in New York City, warns that companies have been found liable for state corporate tax "when the only connection to that state was that they had an employee telecommuting in that state." In March 2010, for instance, the Tax Court of New Jersey ruled that a company whose main offices are in Maryland was "doing business" in New Jersey because an employee telecommutes from there. The company, TeleBright Software Corp., is appealing the decision, arguing that having one employee in the state who develops software from home falls short of the statutory definition of "doing business." The company asserted that it doesn't solicit customers or make sales in New Jersey. Just how much of a tax hit companies face depends on state rules. Some impose income tax based on an out-of-state company's sales in the jurisdiction. Others also take into account the company's payroll and property in the state. However they figure the bill, lots of states seem to be on the same page as New Jersey. In a survey issued in April, 35 states, the District of Columbia and New York City said an employee who telecommutes from a home in the state would create "nexus"âa connection that warrants imposing income tax on an out-of-state employer. Most states don't offer companies clear guidance in this area, says Steven Roll, an assistant managing editor at BNA Tax & Accounting, which conducted the survey. And, he notes, states may face greater pressure to crack down, as they're "struggling to close significant budget gaps." Mr. Bobman offers a potential solution: Have the telecommuting employee resign, form a C or S corporation and invoice the ex-employer for work. But he warns that the former employer would have to pay the former employee more to cover new expenses and lost benefits. And, although it would be a challenge, states could still make a case for taxing the former employer.