Month in Review: November 2017

Here's a selection of four of our favorite Mind Your Business articles from November.

We’re taking a look back and highlighting some of our favorite Mind Your Business articles from November.

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    Innovation at work

    Nottingham Spirk: From Working with Family to Keeping the Innovative Fire Burning

    During COSE’s recent Business Growth Boot Camp, Cleveland’s innovation experts from Nottingham Spirk discussed how to maintain innovation over time, working with family and knowing how to keep the motivational fires burning. Check out more about these topic areas addressed by Nottingham Spirk’s Co-Founder and Co-President John Spirk and his son Evan, director of open innovation, and how they have used these innovation tactics to enhance the success of their company.

    You get a discount!

    Q Pass Program: Special COSE Discount

    Looking for the perfect holiday gift or winter activity? Being a member of the GCP provides you with exclusive benefits, including a discount to some of the most exciting events being held at Quicken Loans Arena. Check out the list of events and promo code to receive your members-only deal today.

    Claim your hidden money

    Find the Profit Hiding Inside Your Business

    Energy audits can help uncover savings of around 20% per building. Schedule your free energy audit with us and we will also help you implement the energy-saving tactics revealed in your audit results. You’ll be saving money in your 2018 budget.

    Make networking fun (it doesn’t have to be an oxymoron)

    How I Stopped Loathing Networking and Started to Love Kibbitzing

    Stop networking. That's right, we said it. Stop networking and start kibbitzing. Instead of contrived and formal, make these situations more natural and enjoyable. Check out these seven tactics to having more success (and fun) next time you're meeting and greeting.

    What was your favorite Mind Your Business article from November? Let us know on Twitter!

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    Next up: More on Small Business Tax Reforms in the State Budget

    More on Small Business Tax Reforms in the State Budget

    Small business owners may have been surprised to read an article in The Plain Dealer Tuesday morning titled “Many small businesses face one-year tax increase under Ohio budget bill”. While we believe the PD piece is factually correct, what may have been easy to miss is that the increase seems to be the result of a drafting error and it does not appear to be the intent of the legislature to raise taxes.  

    More on small business tax reforms in the state budget

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    Small business owners may have been surprised to read an article in The Plain Dealer Tuesday morning titled “Many small businesses face one-year tax increase under Ohio budget bill”. While we believe the PD piece is factually correct, what may have been easy to miss is that the increase seems to be the result of a drafting error and it does not appear to be the intent of the legislature to raise taxes. 

    The state budget that was signed by Governor Kasich on the evening of June 30th called for a flat 3% tax rate on business income above $250,000 – beginning in 2016. The problem is that for 2015, while there is a 75% business income deduction, the budget language applied a 3% flat tax to the remaining taxable income. Therefore, the 3% rate is currently in effect for all taxable business income not exempted.

    We believe this was an oversight in the drafting process of an almost 3,000 page state budget document. We do not believe the legislature or the Governor intended to raise taxes on small businesses this year. And, we are already expressing concern with leadership – on behalf of those that could be impacted – should the legislature choose not to address what many simply believe to have been an error. 

    The good news is that the legislature and Governor have through the end of the year to fix any errors because they can apply changes retroactively.

    Tax code is complicated. COSE acknowledges that “anomalies” can take place when changes are made. We urge the Ohio General Assembly and Governor Kasich to approve language that clarifies this issue so that small business owners don’t face an unexpected tax bill before they’re fully and permanently exempt from paying business income on their first $250,000 in 2016.


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    Next up: Most Anticipated Northeast Ohio Projects

    Most Anticipated Northeast Ohio Projects

    In light of all of the development happening in Northeast Ohio, Mind Your Business recently sat down with several COSE members and asked them to discuss what projects they have on their own personal wish lists and what development gaps might still exist.

    In light of all of the development happening in Northeast Ohio, Mind Your Business recently sat down with several COSE members and asked them to discuss what projects they have on their own personal wish lists and what development gaps might still exist.

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    As part of this discussion, we also asked our expert panel to list what their most anticipated projects are that are actually in the pipeline for the region. Their answers are below.

    Lakefront Development Project 

    Cost: $280 million

    Scope: Vibrant mixed-use neighborhood

    Includes: Apartments, office and retail space, parks and water access space

    University Circle City Center District Project

    Cost: $280 million

    Scope: Mixed-use neighborhood project

    Includes: Residential and housing units, street-level retail space, loft office space, and garage parking

    Opportunity Corridor 

    Cost: $331 million

    Scope: Three-mile boulevard connecting University Circle to East 55th Street, creating a 21st-century employment zone

    Includes: Mobility enhancements, economic resurgence, community re-investment

     

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    Next up: Municipal Income Tax Webcast: What you need to know about state law changes

    Municipal Income Tax Webcast: What you need to know about state law changes

    As teams begin to hit the field in preparation for the upcoming football season, we want to ensure you are also gearing up for the game-changing effective date of House Bill 5's municipal income tax laws. Municipalities are currently amending their existing income tax ordinances to incorporate the new law’s provisions, and your business should be prepping now too in order to be ready by the end of the year. To take a deeper dive into the new law and help you plan now for changes that will impact you, your business or your clients, please join us as former Ohio Tax Commissioner Tom Zaino hosts a webcast on September 28th at 9:30 a.m.  Register here today!

    As teams begin to hit the field in preparation for the upcoming football season, we want to ensure you are also gearing up for the game-changing effective date of House Bill 5's municipal income tax laws. Municipalities are currently amending their existing income tax ordinances to incorporate the new law’s provisions, and your business should be prepping now too in order to be ready by the end of the year.

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    To take a deeper dive into the new law and help you plan now for changes that will impact you, your business or your clients, please join us as former Ohio Tax Commissioner Tom Zaino hosts a webcast on September 28th at 9:30 a.m.  Register here today!

    In the meantime, summarized below are just some of the benefits coming your way starting in 2016:

    Pass-through entities

    If your business is organized as a pass-through entity (“PTE”), the municipal net profits tax will now be imposed at the entity level (unless your municipality is one of a handful that previously voted to tax resident S corporation owners at the shareholder level), with the owner needing to file only in their city of residence. Also, gains and losses that are generated by resident taxpayers’ different pass-through entities and their own net profit may offset each other during the year in which such gains and losses were generated to arrive at the total amount of tax due. 

    NOL carryforward

    If your business does not have a profitable year, some relief is coming: starting in 2017 all municipalities must allow businesses to deduct any new net operating losses (NOL) and allow a five-year carryforward of those losses. Profits and losses are measured on a 12-month basis simply as an accounting tool used to facilitate the collection of tax revenues. However, businesses are established with the goal of making a profit over the long haul, not simply in any particular 12-month period. When you have a loss, an NOL carryforward is treated as an asset on your balance sheet to help offset future gains. Therefore, the NOL carryforward becomes an economic development tool by allowing businesses to deduct losses and continue to operate, helping you with job retention in down years.

    Occasional entry rule

    A significant improvement to the “casual entrant” exemption increases the number of days (from 12 to 20 per year) that individuals may work in a non-principal place of business municipality before incurring income tax liability there. Should your employee be there 21 or more days, you will need to withhold in that “other” city from day 21 forward until the end of the calendar year. The new law also defines a day to allocate tax liability to the city where an employee spent the majority of time working that day (you must withhold only to one municipality per calendar day), and provides that the casual entrant rule applies to all compensation. Businesses and cities may continue to work out other agreements as well if both parties agree.

    Another major change eliminates the requirement for employers with gross receipts of less than $500,000 a year to track where their employees are working; instead, these small businesses will simply withhold to the jurisdiction where the principle place of business is located. These businesses must still file net profits returns in every city where they do business, but will owe no tax if the amount due is $10 or under.

    Other common sense changes

    If you’ve done work in a municipality in the past but no longer work there, many cities require you to continue filing tax returns anyway for up to three years. The new law allows you to certify to a municipal tax administrator that you are no longer a taxpayer there. Upon certifying, you are no longer required to file with that municipality during future taxable years, unless the tax administrator possesses conflicting information or you start working there again.

    Taxpayer Bill of Rights

    The new law includes the full version of the state’s Taxpayer Bill of Rights at the local level, and requires municipalities to publish a summary of the taxpayers’ bill of rights and responsibilities online, as well as publish its municipal tax ordinances and regulations. It also aligns municipal return filing dates with state filing dates, and makes consistent with federal, state and current municipal tax law the tax return due date for entities with a fiscal year-end other than a calendar year-end.

    Residency changes

    The new law prescribes an income tax employer withholding schedule for all municipalities on a monthly vs. quarterly basis depending on your recent withholding amounts. Finally, municipalities are allowed to treat an individual as a resident for income tax purposes only if the individual is domiciled there, and it adopts 25 generally recognized common law factors for determining an individual’s domicile.

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    Next up: NASA isn't only about rockets; it can help companies "visualize" their businesses in new ways

    NASA isn't only about rockets; it can help companies "visualize" their businesses in new ways

    When folks think of NASA, they think rockets and the moon. For the most part, you’re right. NASA Glenn specializes in many of those fields of engineering. But this year’s winners of the 2016 Tech Team of the Year award specialize in helping you visualize things in a way you’d never thought could help your business grow. I had the chance to learn more about how this team operates and they also took me on a 3-D test ride in a lab that can help organizations like General Motors and Ford make vehicles last longer and run better. Hope you enjoy this podcast as much I did hanging out!

    When folks think of NASA, they think rockets and the moon. For the most part, you’re right. NASA Glenn specializes in many of those fields of engineering. But this year’s winners of the 2016 Tech Team of the Year award specialize in helping you visualize things in a way you’d never thought could help your business grow. I had the chance to learn more about how this team operates and they also took me on a 3-D test ride in a lab that can help organizations like General Motors and Ford make vehicles last longer and run better. Hope you enjoy this podcast as much I did hanging out!

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    Next up: National Regulatory Budget Act Introduced in Both U.S. Senate and House

    National Regulatory Budget Act Introduced in Both U.S. Senate and House

    Rules and regulations can be challenging for small business owners to understand and comply with, and they are not always top of mind for employers until they are directly impacted by them.  Thankfully, there are some institutions and processes in place that can help, and there’s federal legislation that aims to address this common small business pain point even further.  

    Rules and regulations can be challenging for small business owners to understand and comply with, and they are not always top of mind for employers until they are directly impacted by them.  Thankfully, there are some institutions and processes in place that can help, and there’s federal legislation that aims to address this common small business pain point even further.  

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    U.S. Senator Marco Rubio (R-FL) introduced a bill, the National Regulatory Budget Act (S. 2153), in March 2014 that has been referred to U.S. Senate Committee on Homeland Security & Government Affairs.  Our friends at the National Small Business Association (NSBA) played a vital role in crafting this legislation. If enacted, it would provide the following:

    • Strict, enforceable constraints on the ability of the federal government to impose regulatory costs on the public by requiring regulators to assign a cost to all regulations as well as staying within a Congressionally determined “regulatory budget”
    • It would create an independent agency, “The Office of Regulatory Analysis” (ORA), that would provide an annual regulatory analysis of federal rules and their economic costs for the upcoming years in dollars.
    • The ORA director would be nominated by the President for a four-year term, subject to the advice and consent of the U.S. Senate.

    On July 24, U.S. Representatives Steve Scalise (R-La) and Doug Collins (R-Ga) cast their support for this concept by introducing a companion bill, H.R. 5184, on the House side.  COSE and NSBA appreciate both representatives for their leadership roles in introducing this language.

    COSE has been highly active at the state level promoting regulatory reform and fairness. As long time supporters of Senate Bill 3 (legislation that further ensures small businesses are included in the rule-making process), which was signed into law this past June, COSE has worked in conjunction with the Lieutenant Governor’s office and the work of Ohio’s Common Sense Initiative (CSI) as it aims to ensure that all current and future state rules and regulations are fair and equitable, and don’t cause undue burdens for small businesses. In fact, CSI is led by a Small Business Advisory Council in which two Northeast Ohio COSE members are part of.   The panel is made up of nine small business representatives that are committed to providing direction and expertise throughout small business reviews of state rules and regulations to help achieve a more positive regulatory environment in Ohio.

    In addition to COSE’s support of CSI, we recently hosted National Ombudsman Brian Castro, who works on behalf of small businesses across the U.S., ensuring regulatory fairness. COSE provided members with the opportunity to engage in a dialogue with him regarding the challenges and needs of small businesses in Ohio relating to federal rules and regulations. The National Ombudsman works with 10 small business Regulatory Fairness Boards comprised of five small business owners, and COSE is also proud that one of our own sits on our Region 5 Regulatory Fairness Board.

    COSE can help you navigate through the regulatory process, catering to your specific needs. For more information or questions, please email jburns@cose.org. We also encourage you to tweet at us: @COSEsmallbiz #COSEadvocacy 

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