PBN summit tackles tax changes, government regs

What business owners need to know about changes in health care laws, corporate income and estate tax codes, the potential for a federal Internet tax and a new electronic unemployment claims process will be the focus of the PBN Summit on Government Regulations & Business Nov. 6.
The summit, from 8-10 a.m. at the Crowne Plaza Providence-Warwick, will feature four panelists from three businesses and one from the Rhode Island R.I. Department of Labor and Training.
Panelist James Raiola, a financial consultant and the principal at James Raiola, CFP & Associates in Warwick, said certain industries will be hit harder than others when they have to comply with the employer-mandate provision of the Patient Protection and Affordable Care Act, although all applicable companies will have to comply with in-depth IRS returns to prove compliancy.
In 2015, the provision only applies to companies with 100 or more full-time employees. In 2016, companies with 50 or more full-time employees will also be impacted.
Applicable employers must make a contribution to the cost of a single-only plan where that plan doesn’t cost more than 9.5 percent of the worker’s gross income. The plan must also meet certain qualifications, and companies in violation will pay a fine of $2,000 per person.
“Most employers are paying more than the minimum amount that the government says,” Raiola said, adding that only companies that have historically offered no or minimum coverage will have to change how they work. “That would be your restaurant groups, your hotels, your department stores, your food-establishment franchises that hire workers that fluctuate between 10 hours a week and 40 hours a week. … They’ve offered weak to no benefits in the past, and now they’re facing huge penalties.”
The silver lining for small employers is that there are more choices now than ever for plan options, especially as more private insurers come up with their own insurance-exchange platforms to present their increasingly varied products. “For me as a broker, this is what we’ve been waiting for … true competition,” Raiola said.
The DLT’s membership in the Unemployment Insurance State Information Data Exchange System aims to increase efficiency on both sides of the claims process, said panelist Jason Bliss-Wohlers, the department’s coordinator of unemployment insurance programs. Bliss-Wohlers said he wants to spread the word about the success of the platform, which has been run jointly between DLT and the U.S. Department of Labor since 2012.
“We are cutting off significant time [in] that claims process,” Bliss-Wohlers said.
When unemployment claims reach DLT, department staff reach out to claimants’ former employers to verify eligibility. Going through the process with paper forms took more time, cost more money, made more room for errors and sometimes contributed to improper payments on claims – which then, in the collection process, cost even more resources, Bliss-Wohlers said. The website can be used for free, although companies can also choose to pay for programming of a dedicated connection. Since the taxes that pay for unemployment insurance are based on amounts paid, the efficiency of the process has far-reaching impacts.
“We recognize that Rhode Island is an expensive place to do business,” Bliss-Wohlers said. “By ensuring that we are paying out these dollars accurately and knowing beforehand that we are paying them out properly, we’re helping reduce costs and we are helping in some ways making sure it’s a better place to do business.
But despite all the reasons to move online, only about 1 percent of businesses are using SIDES to return unemployment information. Panelist David Riedel, an attorney at Adler Pollock & Sheehan, which has offices in Providence and Newport, said he will speak on upcoming changes to Rhode Island’s estate tax code and how trends in exemption levels have changed some longstanding estate-planning recommendations.
Up until 2014, Rhode Island’s estate tax exemption levels were among the lowest in the country – estates worth at least $921,655 are taxed by the state at their entire value. Groups like the Rhode Island Bar Association lobbied for the exemption level to increase for years, saying the exemption levels put Rhode Islanders at a disadvantage and could drive businesses away. State legislators voted to increase that level to $1.5 million starting in 2015, and estates worth more than that will be taxed only on the excess amount.
Riedel said more reform may still be needed. The federal estate tax exemption level was set at $5.34 million in 2014, and most states don’t even have a separate estate tax.
“I think that it’s going to take more than this, but it’s a start,” Riedel said. “It’s more of a setting the atmosphere for a favorable business climate.”
Riedel said he will also talk about planning nontaxable gifts from estates, a policy that was encouraged up until the federal estate tax exemption threshold jumped from $3.5 million to $5 million in 2010. When estate holders leave assets that have appreciated over time, the recipients may be subject to federal capital gains taxes because the original basis is carried over. When an asset stays in the estate it is estimated at its current value, which means paying the state estate tax may be less expensive.
Also joining the panel will be Robert P. Brooks, Adler Pollock & Sheehan managing partner, and Bruce Desrosiers, tax director with BlumShapiro, which has an office in Providence. •

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