House committee hears industry opinions on small-biz

Root out burdensome overregulation, ban permanent Internet taxes and make research and development funding permanent, a panel of technology and telecommunications business representatives and business owners urged a congressional committee today.

House Small Business Committee Chairwoman Rep. Nydia Velazquez (D-N.Y.) said she will dig deeper to find ways to strengthen the business options for innovation, given that small businesses are large consumers and producers of technology.

The committee listened to testimony to understand industry's policy priorities and expectations of Congress.

"It only makes sense that as Congress begins its work on advancing innovation and enhancing U.S. competitiveness, the interests of small businesses are a priority," Velazquez said.

Phillip Bond, president and chief executive officer of the Information Technology Association of America, asked Velazquez to consider the Small Business Administration's proposed changes to size standards for small businesses. The current $23 million revenue size standard for IT-related businesses hampers federal agencies' ability to use small businesses. Also, federal contracts can lift a small company above that threshold, but do not prepare it to compete against large firms in the public sector, Bond said.

He also advocated for stopping the 3 percent withholding tax on payments to federal contractors. He said it limits business options for the public sector and imposes higher costs on companies.

"Companies need a fertile policy environment for their ideas to materialize into products and services ripe for the marketplace," Bond said.

The panelists agreed that Congress should block Internet taxes and regulations, and it must annually fund research and development. But the funding should be extended by more than a year at a time. Ideally, the funding should be permanent, they said.

"Companies like some sort of predictability," said William Archey, president and CEO of the American Electronics Association. Bond added that auditors like it, too.

Matthew Weigelt is a reporter with Washington Technology's affiliate publication, Federal Computer Week.