Mississippi Governor Phil Bryant recently signed
inventory legislation to give companies a larger income tax credit when they pay inventory taxes.
State businesses that pay the inventory tax are permitted to claim up to $5,000 in credit on their corporate income tax under the current law. The new law will raise this cap to $10,000 in 2014 and $15,000 in 2015. The following year, the
inventory compliance legislation will make the credit equal to whichever total is smaller between inventory tax and state income tax.
"We want (company owners) to take that money that they would've otherwise (placed) on paying taxes and actually invest in their business and hire new employees," said the state's Republican Lieutenant Governor, Tate Reeves, as quoted by
The Associated Press.
Opponents argue that requiring businesses to pay inventory tax puts Mississippi at an economic disadvantage, as it is one of only a few states in the nation to levy such a tax.
The American Institute of CPAs (AICPA) recently urged the House of Representatives to approve
accounting legislation that would establish a national standard for the withholding of state income taxes for nonresident employees. The move was in keeping with the organization's consistent support of the bill since last year, Accounting Today notes.
"The change would make state income tax withholding easier to administer and would help ensure that states and local jurisdictions get the taxes they are owed," AICPA president and CEO Barry Melancon said in a
statement.
Melancon noted that the passage of the bill would enhance
accounting compliance by enacting a uniform rule for employees who work outside their resident states for a period of more than 30 days. Currently, the way nonresident employees' income taxes are handled is fragmented across states, thanks to a plethora of state income tax withholding laws and varying exemption periods that act as roadblocks to compliance.
Independence Day falls on a Wednesday this year, which means many workers will be looking to take two days off either before or after the holiday, thereby giving themselves a long weekend.
What does this mean in terms of
U.S. payroll legislation? As
Business Management Daily notes, many companies make the mistake of including vacation pay or holiday pay in employees' regular rates when it comes to calculating overtime. In fact, vacation pay and holiday pay are categorized as compensation for idle time and should not be included in the regular rate calculation.
The news source also notes that there is no federal or state
U.S. payroll compliance law that requires employers to pay their workers for vacations or holidays. Indeed, according to the
Department of Labor, any compensation that is provided is "generally a matter of agreement between an employer and an employee (or the employee's representative)."
That said, there are exceptions for government contracts to which the labor standards of the McNamara O'Hara Service Contract Act and the Davis-Bacon and Related Acts apply.
For the full Business Management Daily article, click
here.
The recent Thumbtack.com Small Business Survey ranked the 'regulatory friendliness' of states and cities using more than a dozen categories, including ease of starting a business, hiring costs, regulations (such as
accounting legislation), health and safety, employment and hiring, tax codes and zoning restrictions.
The ease of observing
accounting compliance requirements and other regulations was "by far the most important factor in determining overall small business friendliness," wrote Thumbtack.com cofounder Sander Daniels in a
CNBC editorial.
Entrepreneurs in Idaho, Texas, Oklahoma and Utah were found to enjoy solid networking programs, low hiring costs and the most minimally frustrating small business regulations in the country, as these states all received an overall grade of A+. Vermont, Rhode Island, Hawaii and Maine trailed with F ratings.
Oklahoma City took the No. 1 position on the city ranking, edging out Dallas-Fort Worth, San Antonio and Austin, Texas. The bottom three cities were all in California: Sacramento, San Diego and Los Angeles.
Look at the survey in more detail
here.
According to a recent Sageworks survey of
accounting consultants, bankers and other professionals in the financial sector, private companies are reluctant to hire.
The 451 financial services professionals who took part in the survey cited a number of inhibiting factors, including concerns about the future of the economy (31.71 percent), a reduced need to hire additional employees thanks to increased efficiency among their current workforce (22.62 percent) and risk aversion tied to the recession (21.73 percent). A total of 13.97 percent named strict
accounting legislation and a belief that the government is generally too active, which they saw as being a deterrent to growth.
"Job creation is really about how business owners feel about their sales numbers," said Sageworks CEO Brian Hamilton in a
statement. "Over 50 percent ... believe that the cause of the lack of hiring is uncertainty in the economy. Until businesses feel as if the expansion is very solid, they may be reluctant to hire significantly."
In conjunction with the reluctance to hire, the finance and accounting outsourcing market is set to rebound this year, according to the Everest Group's recent Finance & Accounting Outsourcing (FAO) Annual Report 2012.
Legislation sponsored by Massachusetts Democratic Senator Marc Pacheco would provide low-interest loans for the state's municipalities to repair or dismantle unsafe dams, the
Daily Hampshire Gazette reports. The proposed legislation would also implement a tenfold fine increase for noncompliance with safety regulations (from $500 to $5,000 per day) and require a yearly dam inventory to be carried out by the Department of Conservation and Recreation.
Supporters of the
inventory legislation maintain that conducting annual checks will improve public safety and ensure emergency action plans are in place for dangerous dams.
A state auditor's report from last year revealed that 100 dams are in disrepair and will cost a total of $60 million to fix. For instance, the Upper Bondsville Dam, owned by the Belchertown Land Trust, requires as much as $400,000 for repairs or removal - a price tag the land trust cannot afford.
The land trust, a nonprofit organization dedicated to preserving open space in the town, noted on its
website that the dam "has consumed much of (the trust's) time and energy over the past two years."
The House of Representatives recently approved the Digital Accountability and Transparency Act, which would establish strong
accounting compliance and reporting standards to facilitate transparency in federal spending.
The
accounting legislation calls for the creation of a website where members of the public can search for information pertaining to the spending of federal funds by government agencies, departments and corporations.
"The American people have a right to know that taxpayer dollars are well-spent," said bill sponsor Representative Darrell Issa, a California Republican who chairs the House Oversight and Government Reform Committee, as quoted by
The Associated Press.
"If it were in place earlier, maybe it would have prevented … abuse," added New York Democratic Representative Carolyn Maloney, who said the bill was "common sense."
Maloney was referring to instances of overspending at events such as the General Services Administration's 2010 conference, which cost $830,000.
"If you didn't know and couldn't trace how they spent their money, you wouldn't know that it was spent on … a mind-reader and a clown," said Issa, as quoted by The Hill.
A group of family farmers, ranchers and fishermen descended upon the nation's capital earlier this month to meet with members of Congress and discuss issues affecting rural Americans, including the 2012 Farm Bill, the state of the dairy industry and climate challenges.
The National Farmers Union Spring Legislative Fly-In event was attended by approximately 100 members of the agriculture industry, including representatives from the Ohio Farmers Union, according to The News-Messenger. Attendees encouraged Congress to support
inventory legislation that would implement the Market-Driven Inventory System (MDIS).
"MDIS utilizes a system of farmer-owned commodity inventories, loan rates and other policy tools to help moderate both extremely low and extremely high commodity prices," a National Farmers Union (NFU) press release explained, noting that the system is designed to be helpful during a long-term market collapse.
"Congress must understand that a safety net needs to be designed and implemented that focuses on family farmers and provides assistance during difficult times," said NFU president Roger Johnson in a statement.
The former chairmen of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) recently encouraged the Securities and Exchange Commission to make a decision about whether or not to adopt international
accounting compliance standards, Accounting Today reports.
Sir David Tweedie, former IASB chairman and current head of the Institute of Chartered Accountants of Scotland, noted that the SEC's indecision over committing to International Financial Reporting Standards (IFRS) is causing other major countries - including China, India and Japan - to hesitate in their adoption.
"The U.S. decision is going to be a very important one," echoed former FASB chairman Robert Herz, as quoted by the news source. "It's important that the U.S. be proactively involved in shaping the future of the global reporting system. We're at the point where we need some clarity from the U.S. on where we're going."
Last year, the Financial Accounting Foundation voiced its support of "condorsement" - a portmanteau of the words "convergence" and "endorsement" used to describe a proposal to incorporate IFRS into the current U.S. reporting system, a framework of
accounting legislation called Generally Accepted Accounting Principles.
A total of 37.6 percent of auditors expect to uncover failures to uphold
accounting compliance standards among their own clients, according to a recent study by secure audit confirmation services provider Confirmation.com.
The survey polled more than 900 auditors representing all of the top 100 accounting firms, and found that respondents expected competitors to find fraud at a much higher rate - 66.9 percent.
"Auditors often exhibit this particular form of disassociation bias," commented Confirmation.com founder and chief marketing officer Brian Fox. "They are certain that they would never take on a client who they believe would commit fraud … They believe (fraud) is something that will most likely happen on someone else's watch."
Another key finding of the study was that nearly one-quarter of respondents reported that they expect audit fraud to increase in 2012. Additionally, approximately 73 percent said they believe new
accounting legislation intended to regulate the industry has made processes more costly and labor-intensive.
A recent poll conducted by Deloitte revealed that 57.7 percent of companies plan to dedicate more time and resources to improving their compliance programs.