As the Wayfair decision begins to settle in and more and more States write regulations to follow with what items they feel are subject to sales tax in there state for out-of-state sellers, it appears the trend is just getting started. Employers BEWARE!
The Wayfair decision has definitely changed how many employers need to keep records for sales taxation and the large new paperwork burden it is placing on them. However, what’s next? Many believe the Wayfair decision will directly impact income tax filing regulations as well many more companies subject to state income tax filing obligations as well. But is there more??
The recent new wave in the government has been to make sure employees have enough money to retire on. Maybe that stems from the do-good mentality of our officials or maybe it stems from the fear that they can’t fix the social security system enough. So where does that lead us? Making sure employers all have access to retirement plans for their employees and making sure all employees are enrolled. Some states have already begun this mandate. California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, new York, Oregon, Vermont, and Washington (the city of Seattle has their own mandated plan) have all begun to roll out MANDATED employer retirement plans. But what does that mean for the employers? If you do not provide some qualified retirement plan to your employees you may be required to either join the state plan or pay a fee (we call that a penalty in the tax world). Most states are just beginning the requirement and have staggered the dates. For example, Illinois has already required employers with more than 500 employees to follow the rule. Employers with more than 100 employees will be required July 2019 and employers with 25-99 employees will begin November 2019. Currently, the Illinois plan (like most) do not have mandates for employer matching contributions…CURRENTLY. How will this be enforced? Most states will rely on payroll tax filings to determine if an employer is required to have a plan, and that INCLUDES out-of-state employers. For those companies with employees working in other states, these rules DO APPLY! Will these plans be challenged in court? Do these plans violate Federal retirement guidelines? Only time will tell.
The burden of added regulations will continue to fall onto the employers. Failing to follow the continued waterfall of laws will mean penalties and added headaches for all businesses. Make sure your CPA partner knows all the rules. RPB can help make sure your business stays on the right track. Partnering with the right CPA firm is sometimes the best money your business can spend. Let us help you keep on-top of the ever changing world of taxation.
Brad Voght, CPA is the tax partner at Reilly, Penner & Benton, LLP, a public accounting firm and trusted adviser specializing in business and personal tax matters as well as in not-for-profit work, school organizations as well as government and municipal agency work. The firm also provides ERISA audit services to publicly held entities throughout the country. A PCAOB registered firm, Reilly, Penner & Benton CPAs also known as RPB CPAs, has served closely held businesses and has provided tax preparation and advice, financial statement audits, reviews and compilations, employee benefit plan audits, bookkeeping services, business valuations, fraud prevention and consulting services since 1907.