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Be Careful If You Are Considering Moving to a “No-Tax” State!

November 21st, 2016

Ken Bagner, Member in Charge of the Sobel & Co. Tax Practice, is our guest blogger today – sharing some key insights as thoughts start turning to year end tax planning!

There are several states that currently do not impose income tax on their residents. These include Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming and in Tennessee and New Hampshire, individuals pay income tax only on dividends and income from investments.  Recognizing that this seems like a boon for individuals, it’s important to dig a little deeper into what this really means. First of all, these states still have budgets and still need to generate revenue to pay for parks, highways, bridges, schools and all the other state-supported institutions and programs. This is accomplished by taxing other items rather than income tax.  Food, apparel and gasoline are often the first targets. In fact, Tennessee has the highest sales tax in the country and in New Hampshire homeowners pay some of the highest effective property taxes in the country according to RealtyTrac. And in Washington, the prices at the pump are typically among the nation’s highest.  As you would assume, similar statistics exist for the rate of sales and property tax in other states that also do not tax income.

But if this does not discourage your move, and you are packing up to head for a no-income tax state, there are still a number of significant factors for you to consider.

The timing of your move matters

When you anticipate leaving your current residence will have an impact.  For instance, if you are planning your move just before selling your business  or receiving a large settlement check with the obvious reason being to avoid paying income tax on the additional income you will be generating, do not assume you can quickly get out of town to circumvent taxes owed.  The amount of time you have spent in the new state, combined with substantial connections in a previous state, will raise a red flag and create suspicions about your motive for moving.  You may actually have to pay some tax to the state you are exiting.

The location of your principle residence and location of  your spouse and children matters

The tax authorities may not consider you a resident just because you spend time in your newly adopted state. Instead, they will examine how much time you are in your former state – and that should be less than 183 days a year to be viewed as a non-resident.

Where your vehicles are registered and where your driver’s license is issued matters

When you are making the case that you are resident of a new state, you will need to quickly change your driver’s license and car registration or your claim to residency will be deemed suspicious.

Where your doctors, dentists, accountants, attorneys and other advisors reside matters

As you seek to substantiate your residence status in a new state in order to leverage their no income tax laws, you will need to show that your consistently interacting in a meaningful way with professionals in the new state.

Everything matters!

The reality is that anyone leaving one state for another based on a tax strategy will need to demonstrate that they have made a legitimate move and settled into a new state. This means you bank primarily in the new state, you vote there, you are a part of the religious, professional, social and civic community there and your homeowner’s property exemption or other formal documents, such as your federal income tax forms, are filed there.

Leaving a state that has high income taxes can be a smart move – and with good advice, a solid plan and a thorough approach – you can come out ahead. But you have to be aware that the states are becoming more vigilant and skeptical. The higher the stakes, the more doubtful they might be of your intentions. This mistrust results in routinely asking more questions, demanding detailed proof that you are a bona fide resident of your newly adopted state and questioning whether or not the timing of your departure is dubious.

If a move to a new state that is income tax free is on your horizon you could still be vulnerable to paying tax in the state you’ve left. Be sure to consult with your tax accountant before making any changes.


How to Talk to Prospective Customers

October 9th, 2016

Well the easy, relaxed days of summer have evolved into the more serious, “get down to business” season that best describes the months of September and October. With that in mind I was glad to attend a business development training session this week at NJ Manufacturing Day at the Palace in Somerset hosted by NJ MEP.  The speaker of this session offered some key insights for owners and sales professionals as they approach meetings with prospects.

Her first piece of advice is to be well-prepared before the meeting. Draft an agenda, consider sending it in advance to demonstrate how seriously you take the opportunity and how focused you are on the conversation.

Next, when you get in the room, ask important questions – then ask permission to take notes – and pay attention to their responses. Remember, asking questions enables you to control the direction of the conversation and to make your point and showcase your solutions.

Remember that 55% of the conversation is non-verbal and 38% of your message is paraverbal – sent through  your tone, body language, and inflection as much as the words you use, which is only 7% of the actual conversation.

Lastly, her final words of advice are to paraphrase, summarize, recap and  clarify the conversation to be certain that there is consistency.


Pillars for Progress

August 14th, 2016

While reading an article entitled “The Ten Commandments for Launching a Successful Start Up” from Inc.com, I realized that  much of the advice was equally appropriate for any company – including established organizations in both the corporate and nonprofit worlds! I believe that many of the ideas put forth are worth repeating here – with some additions of my own:

  • Ensure that every member on your team can articulate your value proposition – or your mission
  • Recruit the best management team possible – and focus on retaining these top influencers over the years – leadership matters!
  • Encourage risk taking and support failure when it happens, but learn form every mistake so that you do not make the same one twice
  • Listen carefully to everyone who has a stake in your success –  because from the top to the bottom as well as inside and outside the organization – diverse, objective perspectives can only make you better
  • Learn from other organizations around you; pay attention to best practices identified by other leaders you trust
  • Be daring and innovative but know when you are being unrealistic – stick to your plan and try not to chase after every new idea – especially those that do not fit well with your goals
  • Be educated about the business angle of the company; understand the financial and legal aspects and surround yourself with really smart advisors
  • Be careful and yet at the same time cultivate an attitude that is willing to think outside the box. In other words, maintain balance. Adopt an approach to success that brings sustainability and profitability

These may work for you at every level and at any time within your company or nonprofit organization. Let us know how you are doing!


View From the CEO Office

July 28th, 2016

Last night I had the privilege of hearing  Association for Corporate Growth New Jersey’s keynote speaker, David A. Brandon, talk about change.  As the Chairman and CEO of Toys R Us, with its extraordinary brand and stellar reputation worldwide as a specialty toy store, Dave (he prefers to be called Dave) told us what it feels like to bring joy to children every day. Most importantly, he shared his philosophy that has at its core a relentless striving to be the best.  As they say in the movies, “He had me at relentless.”

As a businessman he understands the importance of being a category killer, competing against the giant international retailers like Target and Walmart who also sell toys (along with everything else) and of being positioned to address the needs and demands of a changing consumer.  As he reminded us, the millennials use technology to shop in a way that no previous generation ever has – and retailers small and large are going to have to accommodate that trend. It is a new approach to the market and Toys R Us is prepared to embrace change even more efficiently and effectively now than it has in previous years.

As a husband, doting father and grandfather of seven, Dave made the case for change, for vision and for passion, often sounding as much like the Chief Cheerleader as a Chief Executive Officer.  But when he said that he has 61,000 families to take care of, it drove home the breadth of the responsibilities facing all leaders at the top as they do their best to build thriving companies where employees can earn a living, perform meaningful work and impact the community.  And he takes that role very seriously.

It was terrific to have Dave as ACG NJ’s guest at this annual Summer Evening Out at the Highlawn Pavilion. The networking with extraordinary colleagues, along with a great menu and a spectacular view, make this event a sell out every year and 2016 was no exception! I hope you can draw on Dave’s comments as you strive relentlessly to be your best and to nurture your employees to do the same.

Building Relationships for the Long Term is Key

July 8th, 2016

In her recent blog post entitled “#1 Sales Tip Given to 1000 Business Leaders”  on July 5, Caryn Kopp  wrote that there has been an elongation of the sales cycles in almost every industry she has observed within the last 6 months.

In her words: “Why this is occurring is not half as important as the corresponding reaction to it by many businesses. At the same time that it takes longer to get from initial meeting to closed sale, there has been a notable increased fatigue and heightened frustration amongst sellers AND management to stick with the sale and do the necessary steps to deepen prospect relationships to be the vendor chosen when prospects are ready to spend. This combination is an unfortunate recipe for lost sales as well as wasted investment in sellers and marketing campaigns. Some leaders even encourage their sellers to give up on prospects if they don’t close in the time period management feels is acceptable. One technology business I know had an initial meeting with the CIO of one of the largest banks in North America. The CIO expressed interest and wanted follow up but because there wasn’t an immediate need, the business owner saw no value in the relationship. Mistake.

  1. Decision Makers have reported that when sellers drop them like hot potatoes when they don’t immediately buy they find it so disrespectful that when they do have needs, they will NOT include the offending seller in the decision set.
  2. Opening the discussion and creating interest paves the way for the competitor who IS willing to stick with the relationship and create a true partnership. Who do you think the CIO would rather work with when the time comes?”

To read the entire article, check out her blog at http://www.koppconsultingusa.com/blog/

Corporate Social Responsibility

July 5th, 2016

Many companies today are jockeying  to gain an edge in a congested field of competing companies – and  some have identified new ways to stand out.  This growing trend took root several years ago and it continues to evolve and gain strength as more business owners smartly jump on the corporate social responsibility (CSR) bandwagon.  For profit organizations are quickly learning that ‘doing good’ can be a great marketing tool while creating a win-win situation.

Those companies that are demonstrating a sincere commitment to the community are not only finding ways for their employees to get involved, but at the same time they are also finding new ways to contribute to the nonprofit organizations that support the area’s most vulnerable citizens.   At last corporate leaders can be regarded for more than generating shareholder value as they develop a reputation for providing much needed financial support,  human resources and advocacy for social services, the arts, schools, assisted living facilities, housing and so much more. From food banks to shelters to performing arts centers, volunteers from the corporate world are making a consistent and significant impact.

The ability to do good – and to build a reputation as a company that cares – is one key today for those businesses that embrace the concept to make a real difference.  What are you doing to change the world?

Strategic Planning Matters!

June 22nd, 2016

This is a great time of year for setting aside a day or two to invest in thinking strategically – looking at the bigger picture and going beyond short term goals to consider the longer perspective. Every year the leadership team at Sobel & Co. moves off site for two days to take an honest look at our current situation and that of our industry as well as of the greater business community before transitioning to a deep discussion on where we think the profession is heading, what experts identify as key trends, and what it all means to us and our clients.  This year we pondered the role of the emerging millennial leaders in our firm and in the companies of the clients we serve.  Looking ahead, being strategic, thinking outside the box is an exercise that forces us to consider many “what if” situations and to help us be better prepared for the next phase.


It is all too easy to focus only on the task at hand, but if you do not look down the road, you may find yourself on the wrong path!

The Value of Advisory Boards for Small and Mid-Size Business Owners

June 20th, 2016

In speaking with my friend Lynn Smith at breakfast recently, she reminded me of the important role that can be played by advisory boards, especially for small to mid-size, privately (or family) owned companies.

Small business owners and entrepreneurs wear many hats and as such they often do not have enough time to think strategically.  They are forced to work IN the business, but not necessarily ON it.  They are caught up in essential day-to-day issues and cannot set aside the time to gain fresh perspectives, consider long term goals or prepare for new trends in the industry.

Having an advisory board comprised of trusted business associates can help with that challenge, even for the busiest owners.  Board members can include the company’s accountant, attorney and banker as well as other leaders in the business community or those with knowledge about local regional challenges or the nuances of the sector.  What these board members should have in common is their commitment to the company’s success, their unique ability to bring an outsider’s objectivity to the discussion and their business acumen – gained from their own experiences over time.

Business owners who assemble such a board create a “think tank” of advisors they can trust who will provide them with honest opinions, guidance and suggestions.  The board can meet two to four times a year depending on their availability, but the key is for the owner to develop a formal agenda prior to each meeting, circulating it in advance so that the advisors can attend the meeting well prepared for an informative and meaningful dialogue.  Whether looking for short term solutions or long term strategies – or both – the owner and the company’s leadership team must be open and accepting of the diverse opinions that will be forthcoming.

Although it is a great idea to thank each advisory board member with a  donation to their favorite charity, in most circumstances the chance to meet with each other and to participate regularly in a relevant business discussion with you can be a reward in itself.

Most frequently these meetings are held over dinner at a time that is convenient for the advisors – avoiding the necessity of rushing back to the office which can happen with events scheduled over breakfast or lunch.

If you have some insights into how advisory boards can function most effectively, we would love to hear from you. Want to set up an advisory board? Call me and I will help you!


Does Work-Life Balance Exist?

June 10th, 2016

Much like you, I am always on the lookout for some great ideas or articles that I believe are worth sharing with readers. So when I was recently asked to conduct a webinar on the impact at work of different communication and leadership styles across the generations and I ran across an article written on June 7 on a site called Sharp Heels entitled,  “Re- examining the Concept and Myths of Work Life Balance and Creating Alternative Ways to Think About It,”  I knew I had to share it with you.

The article caught my eye because this is a critical topic today.  I was investigating how long the phrase “work life balance” has actually been around.  Interestingly, it is not a particularly new concept but the term has clearly taken hold as the work place has intruded (thank you in great part to technology!) into our personal world now more than ever before. All generations – from Baby Boomers to Xers and now to Millennials – are talking about it but it is an idea that admittedly resonates most with the younger generations.

Juggling demanding careers and complicated life roles is common place today, but that doesn’t make the task any easier.  This article made some excellent points which I would like to share here.

First of all, the very word ‘balance’ is misleading if it conjures up an image of time spent in equal parts at work versus pursuing personal activities. The quest for balance may never be realized as some days work is demanding and sometimes home life is demanding.  However, the author’s suggestion is to think about this as work-life harmony where both aspects of your world are managed realistically based on the circumstances that occur each day rather than on trying to find equal balance every day in spite of the reality of the situation.

The second interesting point raised is that work and life are NOT separate entities. If you try to handle them as being two parts of your life rather than seeing them as an integrated whole that defines you in your entirety, you will be more frustrated because they cannot easily be separated. They do overlap – when friends at work get together for a lunch time walk or to participate in a charitable function – for example. The two worlds intersect but it doesn’t have to be unpleasant!

The final words of advice were to focus on making the hours at work pleasant.  Try to avoid viewing work as a place that needs to be endured rather than enjoyed (even though it is a four letter word). Create a list of ways for you to bring personal satisfaction to the hours you spend at work, whether it is making your lunch hour into a special time with colleagues (like hosting a book club discussion) or simply listening to your favorite music during the day or when on a break.  When you take time to write down those things that really bring you happiness, you build a plan of action that you can adhere to that enables you to incorporate some of these activities into your work place.  Think about the time you have in your work day and fill the empty spaces with something that brings you joy –like watching a great YouTube video or starting a remote chess game with a friend.  Incorporating these kinds of initiatives into your work schedule can help you blend your two worlds into one so that you no longer think of work as work and your outside life as being apart from your day time job.

Do you have any additional suggestions on how to create a more harmonious life that brings together your professional and personal interactions?

Networking – Helping Others Helps You!

May 20th, 2016

I recently received a wonderful honor from NJBIZ, our local business newspaper here in NJ when they bestowed their lifetime achievement award on me.  They said that much of the reason for selecting me was that I am considered to be a great “connector” who gives back to the community by helping people interact with each other.

I never thought about it much – but actually this is one of the basic tenets of good networking and one that is often overlooked.  While we most often think of networking as something we do so that we can meet new people and build relationships that will benefit us, it is really best done when viewed through the opposite end of the lens.

What I mean by this is that great networkers always find a way to help someone else instead of looking for ways to help themselves or their companies.

Once you begin the process of putting others first, you will find that not noly is it more fun, more rewarding and easier than ever to accomplish – but you will start reaping  the rewards of your authentic generosity because people will want to help you in return.