NCET Biz Tips: Maximizing Your Post-COVID Business Potential

Whatever it is, the way you tell your story online can make all the difference.

by Michael Bosma 

On April 13th of this year, Governor Steve Sisolak announced his goal to have all Nevada counties open to 100 percent capacity by June 1. Roughly one-third of Nevadan’s have been vaccinated, and the consensus is that anybody who wants the COVID vaccine has access to it.  

Main street is generally excited to get back to business.  Savvy business owners have a robust plan to prepare themselves for the “new normal”.  What follows is a general over-view, from a legal and regulatory standpoint, that will assist you to create your own plan. The salient points follow: 

The current state of the filibuster and how it may impact your business:  Democrats are increasingly in favor of reverting back to a ‘talking filibuster,’ while Republicans warn of unprecedented Senate gridlock if the stall tactic is ever eliminated.  While much of this topic was the subject of much pontification for the talking heads on various news outlets, the momentum train has left this initiative standing at the altar.  Best guess is not to expect any changes (business as “usual”).   

According to the Tax Foundation, under President Biden’s tax plan, the United States would tax corporate income at the highest top rate in the industrialized world, averaging 65.1 percent.   

First, the federal corporate tax rate would rise to 28 percent, which together with an average of state corporate tax rates would result in a 32.4 percent combined top corporate tax rate—highest in the industrialized world. As a second layer of tax on corporate income, the top federal marginal tax rate on capital gains and dividends would rise to 43.4 percent. Combined with average top state tax rates on capital gains and dividends and integrated with the combined top corporate tax rate, Biden’s proposals would produce a top combined integrated tax rate on corporate income of 65.1 percent—compared to 47.3 percent under current law. 

In addition to federal level taxes, 44 states and D.C. have corporate income taxes and most states apply individual income tax rates to capital gains and dividends. The top combined integrated rate on corporate income reflects both the top entity level tax and the top shareholder level tax that apply at federal and state levels.  I believe there will be some move to increase taxes.  Stay tuned for how to navigate once the dust settles.  Once tax rates exceed 50%, people are more prone to aggressive tax planning (yay for me).  Do not be surprised if the tax increase revenue forecasts miss the mark. 

Perhaps the most meaningful impact of Biden’s Tax Plan is the acceleration of businesses selling their business.   The prospect of losing capital gains rates, coupled with the threat of unprecedented inflation will tip the current sellers-market to a buyers-market.  Savvy business owners will have ready access to cash/capital to scoop up bargains as they hit the market.   

Learn about these and other ways to maximize your post-COVID business potential at NCET’s virtual Biz Bite on May 26 from noon to 1 pm with virtual networking from 11:30 am until noon. NCET is a member-supported nonprofit organization that produces educational and networking events to help people explore business and technology. More info at https://www.ncet.org/ncet-event-calendar/ncet-biz-bite-prepping-for-post-covid-success-may-26

Michael D. Bosma, CPA, is the Office Managing Principal & Chief Deal Maker at Keystone CPAs.