Big regulatory changes that could affect your business

Compliance is an important part of conducting good business. It is essential to observe all rules and regulations in order to maintain a competitive edge. If you fail to follow the law, it’s bound to come with penalties that could result in the downfall of your business. Regulations change periodically, so it is crucial to stay informed and up-to-date about policy changes as they happen.

Many of these changes can affect your small business. So, keep an eye on recent developments, which might save you from future losses. Below are laws likely to change and affect the way your business operates.

Sales tax

The South Dakota v. Wayfair Supreme Court decision marked the end for e-commerce tax exemptions. South Dakota challenged a decision made earlier that compelled companies to pay state sales tax if they had a physical presence in a particular state.

The court documents found an estimated $48 to $58 million of annual tax loss revenue. Moreover, the U.S. Government Accountability Office determined that states lose billions of dollars in untaxed e-commerce revenue.

Online service providers may not know the specific state requirements regarding sales tax increase on digital products; however, the government expects online retailers to analyze what is likely to happen to the state laws dealing with sales tax on out-of-state business.

Tariffs and trade policies

Tariffs and trade are always hot topics in the international trade news cycle. After the 2017 inauguration of Donald Trump, an announcement of state tariffs once again lit up the international press. However, these tariffs mainly affect Western trading partners like Canada and the European Union member states.

Tariffs are taxes placed on imported or exported goods and they have a significant impact on international economies. They can even affect businesses and countries that are not directly targeted by these taxes. Understanding how international trade policy can distress your small business is essential. The market will adjust changing overhead and price points, which have the potential to negatively impact business as usual.

Any good business owner prepares for market changes by purchasing essential goods while also setting aside extra liquid capital and negotiating contracts with suppliers in case of rising tariffs, trade negotiations and their economic impact.

Federal tax overhaul

In 2017, the Tax Cut and Jobs Act was narrowly passed by both chambers of the U.S. Congress and signed into law by President Trump. The improvements carried enormous implications for businesses of all sizes and many states continue to struggle with the changing tax code and the state-level regulations enshrined in the new law.

The law has helped businesses conform to federal policy, but it will take time to identify the effects it will have on small businesses. Throughout 2018, companies are focusing on the business impact of the measure by consulting with financial experts and accountants. There is potential for business professionals to benefit, economically, from the new tax law: especially small business owners.

No matter the judgments made concerning the legislation, the tax code is complicated. The full effects may only be understood when the entirety of the law takes effect within the next 10 years. Entrepreneurs should check on any new developments as the new policy continues to take effect and consult with professionals about strategies to use.

General Data Protection Regulations (GDPR)

The General Data Protection Regulations are in action in EU member states and the implementation could follow up with a similar U.S. law that would help tighten American networks and boost data security for individuals and businesses.

Entrepreneurs should stay informed about all developments that are taking place in their region of the world. It should be noted that while the GDPR is Eurocentric, data policies in the United States are expected to become stricter, so small businesses can protect consumer data like email addresses, passwords and other personal information.

The Affordable Care Act & employee interests

Changes to the Affordable Care Act may not be tabled in Congress, but the new proposed tax policy changes do include a provision that reduces the ACA’s mandate penalty to zero. No changes will occur to the reporting provisions of the ACA, but employers and other self-insured individuals should be ready to comply with the existing provisions.

As local and state governments establish measures to raise the minimum wage and paid sick leave mandates are introduced in Congress employee benefits have become increasingly popular in the U.S.

For business people, offering paid leave benefits attracts more employees but mandatory ones would require additional considerings in budgetting and planning. No matter the size of the company, most employers want to create an environment that is extremely friendly to their employees. Offering paid leave may be a big challenge for small businesses and may create new dynamics for them to navigate.

Nowadays, the laws guiding the conduct of business in the U.S. are constantly changing. In case you have challenges understanding any regulatory changes, get in touch with Mount Bonnell Advisors.  Meet our team of financial consultants and accountants who will explain regulatory changes from financial fields.