The new year promises to bring twists and turns to the business tax law landscape. Although it's still in the early stages and nothing is certain, experts around the industry are advocating for companies to be prepared.
Stay on your toes
The Trump administration's promise to create friendlier business taxes has the stock market flying high, but as of now, nothing has been set in stone. Recently, a U.S. Republican lawmaker told the U.S. Chamber of Commerce that the corporate tax reduction into the 15 to 20 percent range being sought by President Donald Trump will be difficult to pass, according to Reuters.
The lawmaker specifically honed in on the need to pass what's known as border adjustability. Essentially, for the corporate tax cuts to be passed, the export tariff would have to be erased, while the import tax could see a rise to 20 percent, the source reported. This would have dramatic implications on a number of industries, including automakers and retailers.
A number of other legal bouts are currently being waged, according to CPA Practice Advisor. These include corporate rate reductions and a new tax system where the only income taxed is that which is earned inside the U.S.
"U.S. tax reform is more than just rate reduction, and any plan will likely have winners and losers. Company leaders need to model the impact of various proposals, aggressively engage with legislators and make their voices heard as the process moves ahead," KPMG's Jeffrey LeSage told the source.
As nothing is certain just yet, CPAPA recommended all chief tax officers stay tuned in to what's happening on Capitol Hill so they can be prepared for any change that could come at a moment's notice.
Ditch the pen and paper
LeSage also urged businesses to bring their tax departments into the digital era with a number of different tools, like platforms to analyze data, automation and even cognitive intelligence.
Not only will the aforementioned changes give your employees the gadgets they need to boost productivity and effectiveness, but they also allow them to be agile within their sector. The new regulations and legal updates approaching will mean compliance changes are ahead. Tax officers should be able to quickly ascertain any potential risk and ensure the business' taxes are completed without potential liability.
Further to this point, partnering with an agency with years of experience working within the business tax law landscape could turn into a fruitful relationship as companies are likely to have their fair share of questions and concerns moving forward. Spending the money on a tax consultant could potentially save an organization from innumerable fines down the line.
Seek new talent
In line with the aforementioned point, CPAPA reported businesses will need to broaden the type of qualifications they look for in new hires, specifically pertaining to their tax departments. The word of 2017 is "nimble," according to LeSage, and the skill set employees have in this sector will largely dictate the success of the company.
"Sometimes it's tough to attract, develop and retain these professionals in tax departments," LeSage told CPAPA. "Savvy leaders know that investing in rotations, cognitive training and leadership experience will help their people develop the skill sets and knowledge they need for them and their companies to succeed."
Companies without the financial resources to hire new employees or revamp training to accommodate the changing business tax law landscape should consider turning to an experienced tax professional that can help identify which areas the organization is lacking in, and perhaps provide assistance in a number of different ways. The new year is primed for upheaval in the industry, and employers that are active, diligent and agile will ultimately avoid any unnecessary headaches.
Do you have any questions? Would you like to discuss the matter further? If so, please contact me, Jeffrey Pittard, at 201-806-3364.