State government policy matters to your business. Just paying attention to federal policy will not cover all that your business needs to know in order to avoid possible policy pitfalls. There are three reasons state government matters to your business.
Regulations: States make regulatory decisions every day that could affect your business and how it operates. There could be up to 20 to 30 proposed new regulations a week in any given state. Most state governments work the same way in that they first propose new regulations and publish the proposals for public comment. After the public comment period many states make changes to their proposals or make the proposal permanent. Once a proposal for regulation is permanent your business must start to comply. Some states may propose an emergency regulation that will eventually become permanent without public comments.
States can regulate almost every part of your business from how much you have to pay your employees to what basic training needs to be done in your industry. You must follow these changes in order to avoid fines and other serious consequences that may come from non-compliance. The best place to start is by watching for regulatory changes in the state agency that regulates any licenses that your business may require to operate.
Licences: This brings us to the second reason that state government policy matters to your business. In order to operate as a business in any state you will need a license. You may need multiple licenses based on the type of business you operate. For instance, many business that operate in the healthcare industry may be required to keep at least five licenses up to date from several state agencies. It is important to watch these agencies that control these licenses as they may make changes that could prevent your business from operating in the state.
Taxes: The final reason state policy matters to your business is taxes. Many states these days have overrun their budgets and are running at a deficit. They may choose to make up the difference by placing special taxes on your operation. For instance, some states have proposed gross receipts taxes in the past. Any taxes on your business will have an effect, though if you have a very small margin of profit, a gross receipt tax may affect you in a more negative manner than other businesses. This is why we always recommend that clients watch their state’s budget negotiations every year as this may offer clues as to what the state may tax next.
Regulations, licenses and taxes are some of the most important reasons why state governments matter to your business and its operations. Following all of these policies may be challenging on top of day to day operations. Having a government affairs team may help with these issues. True North offers several solutions to help figure out how state policies are affecting your business. One of the best places to start is our Insight Sessions. With just two hours and a memorandum True North can explain confusing state policy issues for your team.
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