A report published by www.bizjournals.com, small business owners in Massachusetts can claim state sales tax exemption on electricity, gas, heating fuel and steam purchases by filling a ST-13 form.The exemption is available to small business owners with five or less employees and generating less than $1 million in income.

The tax exemption can benefit small business owners to the tune of hundreds to thousands of dollars. To inform and alert small business owners, the Massachusetts Department of Revenue has released an online video explaining the details of the tax credit program.

Read more about state tax credits for small businesses.

The Small Business Administration recently launched an online tax savings resource center to assist small companies in identifying the benefits of the economic stimulus package introduced in January of this year. The resource center explains the new tax benefits and estimates the first-year depreciation for small businesses using online calculators and tutorials. Because the SBA found that most small businesses remain unaware of the benefits of the package, officials hope that entrepreneurs will take the advantage of this resource.

The stimulus package increases the expensing limit from $128,000 to $250,000 and amount of depreciation deduction by 50 percent in the 2008 tax year. However, it is worthwhile that small businesses consult their tax advisor as there might be exceptions and provisions to these benefits.

For SBA resource center, visit www.sba.gov/stimulus/ and for details of tax changes visit the Internal Revenue Service’s Web site.

Small businesses are vital to the health of the U.S. economy. According to the Senate Committee on Finance, small and medium enterprises constitute 99.7 percent of all firms and employ nearly half of the private-sector workforce. More importantly, over 75 percent of job creation in the past decade can be contributed to small businesses.

Amid panic of a waning U.S. economy, the Committee passed a bill on January 30th that includes tax provisions for small businesses. Introduced by Senators John Kerry (D-Massachusetts) and Olympia Snowe (R-Maine), the economic stimulus package increases small business expensing for 2008, the net operating loss carry back period, and the amount of investments that businesses can write off in a given year.

Extending the “net operating loss carry back” from two years to five years will infuse financially distressed business with cash. Entrepreneurs will have the opportunity to apply losses incurred in 2006 and 2007 to profitable years dating back to 2001 and receive refunds. Besides this the bill plans to give companies a 50 percent bonus deduction on new equipment that would normally depreciate over a longer term. It would double the limit on expenses to $250,000 from $125,000 that small businesses can deduct from annual income with total cap of $800,000 over 6-year period.

The Senate Finance Committee also adopted provisions from Kerry and Snowe’s legislation that increases the amount of small business tax write offs for new investments this year. These measures combined with the recent 50 basis point Fed interest rate cut will help companies access more capital at cheaper rate and lower tax liabilities.

There’s no doubt that these factors will help the economy. However the jury is still out as to whether these provisions will propel the U.S. economy beyond just short-to-medium term economic relief.