Tax and Finance Management

Expect More From Your Annual Audit

OMA Connections Partner CliftonLarsonAllen writes that manufacturing executives should expect more value from their annual audit, noting a good auditor should provide valuable insights to a company’s leadership team. The firm suggests requesting planning meetings for before and after the audit, as well as an analysis of your performance compared to industry peers. 9/7/2021

State Initiates Payoff of $1.5B Unemployment Loan, Saving Employers From Large Tax Hikes

Ohio has initiated the repayment of a nearly $1.5 billion federal loan used to pay unemployment benefits during the pandemic. This repayment — a priority for manufacturers — will spare Ohio employers from an estimated $650 million in increased taxes over the next three years. (See this week’s announcement by Gov. Mike DeWine.)

Earlier this year, the OMA worked with key lawmakers and the DeWine-Husted administration to enact House Bill 168, which, among other things, authorized the use of federal COVID-19 aid to repay the federal loan that funded the state’s unemployment insurance (UI) system during the worst of COVID-19. Without this action, the debt would have been paid by businesses since employers fully fund the UI system. 9/1/2021

Webinar: Accessing Capital for Small Businesses

Whether you’re looking to stabilize your business or exploring growth opportunities, an injection of capital could help. OMA Connections Partner Fifth Third Bank invites OMA members to participate in a one-hour webinar at 1 p.m. this Wednesday, Sept. 8 to hear experts discuss details about accessing capital for small businesses. 9/1/2021

How to Transfer Ownership of a Family Business

OMA Connections Partner GBQ Partners has published this brief overview of the two key ways to transfer ownership of a family-owned business from one generation to the next. The firm notes that determining the right strategy for transferring ownership depends on the value of the business, as well as the relative impact of taxes. 8/31/2021

NAM Study: Proposed GILTI Changes Would Cost Up to 1 Million U.S. Jobs

The National Association of Manufacturers has released a study on the damaging effects of proposed changes by the Biden administration to the Global Intangible Low-Taxed Income (GILTI) regime under consideration. According to the study, the changes would reduce domestic employment of globally engaged U.S. firms by between 500,000 and 1 million jobs, while domestic investment of globally engaged U.S. firms would be lowered by up to $20 billion. 8/23/2021

Increase in Producer Prices Set Record

While the consumer price index has risen 5.3% over the past 12 months, producer prices for final demand goods and services have jumped 7.7% — the biggest increase on record, according to Chad Moutray, chief economist for the National Association of Manufacturers. (This graph shows the price increase for all manufacturing.)

Despite the recent spike in prices, experts at OMA Connections Partner RSM said this week that “expectations are for the inflation rate in the next few years to move above 2.3% before settling back to roughly 2.25% over time.” (On Tuesday, Aug. 24, RSM will present an OMA webinar to examine how current economic and industry trends will affect manufacturers in “the Roaring ’20s.”)

Nationwide, manufacturing production increased 1.4% in July, the strongest monthly gain since March, according to the Federal Reserve. But the chip shortage and supply-chain disruptions have hindered vehicle production, which remained down 3.6% since January. 8/17/2021

Safe Harbor May Help Businesses Qualify for Employee Retention Credit

The IRS recently created a safe harbor so businesses can more easily qualify for the employee retention credit under the gross receipts test. Learn more about this development from OMA Connections Partner CliftonLarsonAllen. 8/18/2021

New Guidance on Claiming the Employee Retention Credit

On August 4, 2021, the IRS issued Notice 2021-49 to provide additional guidance on claiming the Employee Retention Credit (ERC) in Q3 and Q4, as well as to provide some clarity for frequently asked questions related to all periods of eligibility.

OMA Connections Partner CliftonLarsonAllen breaks it down in this update. 8/12/2021

Webinar: Changes in Store for Section 174 Research Expenses

Next year, changes made by the 2017 federal tax reform law are slated to modify Section 174 — the provision that allows manufacturers and other taxpayers to immediately deduct the cost of qualified research expenses. Under this modification, research expenses would be required to be capitalized and amortized over multiple years instead of being deducted in the year incurred. Now’s the time to consider what will be necessary if Congress fails to amend the provision.

On Aug. 25, OMA Connections Partner Plante Moran will host a free webinar to discuss Section 174 rules and explain the changes on the horizon. Register here. 8/12/2021

A Closer Look: Ohio’s Pandemic-Related Municipal Tax Withholdings

As previously reported, Ohio’s new budget includes several tax changes, including those to pandemic-related municipal income tax withholdings. The budget allows employers to continue to assign 100% of an employee’s wages to their principal place of work until Dec. 31, 2021. OMA Connections Partner CliftonLarsonAllen has published this summary providing a more detailed look at these changes. 8/4/2021