Running a small business comes with many intricacies, and one of those is keeping up with ever-changing regulations for small businesses. There are specific legal compliance requirements, tax laws, and health and environment regulations that continually shift over time and it can be time-consuming to keep track of them.
As a rule of thumb, here are three types of regulations and requirements that small businesses should be monitoring in order to keep operations running smoothly.
State and Federal Compliance
There are some internal requirements businesses must abide by such as federal and state filing requirements. This can include annual reports or biennial statements, statement filing fees, franchise taxes, initial reports, and Articles of Amendment. Businesses also need to comply with the Affordable Care Act, Americans with Disabilities Act, marketing and advertising laws, and workplace health and safety laws. Many of these regulations will vary by state and the type of business structure.
Along with filing requirements, it’s critical to stay up to date on licenses, permits, and certifications. Most licenses and permits need to be regularly renewed, such as health and safety certificates, sales permits, or service licenses. Be sure to check with local business licensing offices for specific regulations based on state, city, and county laws.
Federal and state tax laws are among the most frequently changing regulations for small businesses based on passing bills and policy shiftings. As a business owner, it’s important to know and understand federal, state, and local tax requirements. They will vary by location and business structure, but the most common include:
- Estimated taxes — Self-employed business owners are required to make quarterly tax estimate payments to both the IRS and state department of revenue based on the amount of income they expect to make within the year.
- Employment taxes — If a business owner has employees, they must file particular forms and pay social security and Medicare taxes, federal income tax withholding, and federal unemployment tax. Self-employed business owners pay the equivalent of social security and Medicare in self-employment taxes.
- Excise taxes — Certain businesses that manufacture or sell products and use various types of equipment or facilities may need to pay an excise tax.
- Property taxes — Some states only collect property tax from commercial real estate, while others do so for vehicles, equipment, or other physical assets.
Because these taxes can vary state by state and there are often additions or changes to the intricacies of tax laws, it’s wise to speak to a financial professional or tax advisor to ensure the correct amount of taxes are being paid.
COVID-19 and Health Requirements
The tricky part about COVID-19 regulations is that they are constantly changing as the virus changes, and some are recommendations while others are requirements. However, not following recommendations can still present a legal situation and convey that a business is not recognizing the importance of the issue.
Depending on the state, there may be local emergency orders that must be followed in order to operate a business in person. We have seen the requirements to wear a mask or for the business to provide masks to its employees, social distancing rules, sanitization requirements, and so on. Health and safety regulations are of the utmost importance at any time. Still, particularly during a pandemic — it’s critical to listen to government mandates and policies even as they continue to fluctuate.
At Republic Bank of Chicago, we always prioritize helping small businesses operate smoothly and feel set up for success. If you have any questions about your small business finances, contact us at 800-526-9127 and find additional financial tips on our website.