Regulations nearly always result in businesses needing additional capital to comply. The costs could be direct costs, such as an increase in minimum wage, or indirect costs, such as those costs which are associated with changing reporting or licensing requirements. Regardless of the size of your business, this means you need to find ways to increase your income or maximize your cash flow.
Online Sales Tax Law Changes
Online retailers or service providers may feel the impact of a recent Supreme Court decision passed down in South Dakota v. Wayfair, Inc., 585 U.S. As a result of this decision, more online Ecommerce sites will be required to collect sales tax based on where they are doing business. This means if you do business in multiple states, you will have to determine how that state treats sales tax to ensure you are complying. Failure to do so could result in tax problems later. Currently, 31 states have standing tax laws requiring taxation of Internet purchases and some are based on transaction counts while others are based on actual sales volume.
Changes to Affordable Care Act Mandates
Many individuals were relieved to learn they no longer would face penalties for failure to maintain a healthcare plan which was compliant with the Affordable Care Act. However, business owners should be aware this change does not apply to them. For any business employing full-time employees must make coverage available. This coverage must be full coverage as mandated in the original bill.
Impact of State Increases in Minimum Wage and Paid Leave
Employers in more than a dozen states faced increases in minimum wage as of January 1, 2019. Increases ranged from a modest 20 cents per hour to nearly $1 per hour in other states. This means all business owners should verify what they are paying current employees and understand hiring new employees means paying the higher minimum wage.
While there have been challenges to implement paid family leave on a federal level, some states have implemented changes which employers in those states should be aware of for both current, and new hires. Currently, it is widely expected other states may implement these changes which will impact business owners of all sizes.
Follow General Data Protection Regulations (GDPR) Changes
While U.S. businesses are not currently under direction to take additional steps to protect customer privacy, many tech-savvy firms are already taking steps to ensure they are doing everything possible to ensure data privacy. This is because many believe that while this is currently a regulation for U.K. businesses, there will be a push in the United States to implement these changes. These regulations should be carefully monitored by every business, and where possible, steps should be taken to get ahead of potential future legislative changes before you are mandated to implement change.
The Impact of Federal Tax Policy Reform
There have been mixed reports about how the changes in federal tax law have impacted business owners. For example, we know most large businesses saw an increase in their bottom lines. The impact of the new tax law on small and mid-sized businesses remains a bit of a mystery, but one challenge is making sure you know how tax reform will force you to make changes in reporting, tax filing, and the impact of your deductions. Many businesses will be forced to seek assistance of a tax expert to ensure they are not missing valuable deductions or credits.
Since many new regulations only went into effect on January 1, 2019, some business owners may not feel the financial impact immediately. However, any business who is planning to hire new employees, or is impacted by changes in minimum wage may be facing immediate cash flow issues due to these changes. If you are one of the thousands of business owners nationwide who feel a cash crunch due to regulatory changes, contact Capstone today at (212) 755-3636 and let us help you identify the best options for increasing your cash flow without taking on additional debt.
