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In Minnesota, business exit planning means helping an owner build a company that can change hands on their terms, whether that happens in two years or ten. For advisors, three things are in play at once: Building value in a business inside Minnesota’s deep medical device and healthcare cluster, known as Medical Alley, alongside a diversified base of manufacturing, agribusiness, and financial services Working within one of the highest state income tax structures in the Midwest, at rates up to 9.85%, plus a newer surtax that can push the effective rate on a large capital gain above that top rate Reading a buyer market anchored by a shrinking but still substantial cluster of Fortune 500 headquarters alongside active private acquirers in med-tech and manufacturing An owner in the Twin Cities faces a different buyer pool, labor market, and valuation pressure than one in Rochester or Duluth, and that difference alone can shift both timing and price. That kind of coordination doesn’t happen without a process behind it. BEI’s exit and owner-based planning programs give Minnesota advisors a starting framework, and the CExP™ credential is what many build toward as a mark clients recognize. Key Takeaways for Minnesota Advisors Minnesota’s income tax runs through four brackets to 9.85%, one of the highest top rates in the Midwest, and taxes capital gains as ordinary income. A newer 1% surtax on net investment income above $1 million can push the effective top rate on a large gain above the state’s 9.85% top rate on wages. Minnesota has roughly 550,000 small businesses, about 99.5% of all businesses in the state. Nationally, more than half of business owners are now 55 or older, according to U.S. Census figures, and most have no formal exit plan, so a large share of Minnesota owners will be heading toward a transition over the next decade. Most successful Minnesota exits start three to five years before the owner leaves. That head start is what makes it possible to raise value, build a management team, and plan around taxes instead of reacting to them. BEI’s membership platform supplies the software and peer network, while exit planning coursework sharpens execution on the ground. Given Minnesota’s surtax and estate-tax nuances, CE renewal is what keeps an advisor’s knowledge from going stale. What Is a Minnesota Business Exit Plan? A Minnesota business exit plan pulls several kinds of advice into one plan built around a single owner’s goals. In practice, that usually means working through: A defensible valuation and a short list of what would meaningfully increase it Confirming the numbers work: whether this sale actually funds the owner’s life after the business Ownership transition design that matches the owner’s vision for the company after they leave Planning around Minnesota’s income tax and investment income surtax on the gain, plus the state’s separate estate tax exposure The parts of the plan that aren’t about money at all: when the owner wants out, what their days look like after, what they want remembered Keeping the owner’s goals at the center does one important job: it stops the plan from turning into a stack of disconnected recommendations. Many advisors also pull labor and wage figures from the Minnesota Department of Employment and Economic Development to check workforce availability and local conditions that affect both timing and value. Common Exit Strategies for Minnesota Businesses Advisors in Minnesota tend to look at four main ways an owner can leave. Each one trades off differently on cash at closing, how much control the owner keeps, and how the deal gets taxed. The right fit depends on the owner’s goals and on the business itself. Exit Strategy Liquidity at Close Owner Control After Key Tax or Structural Consideration Often Best Fit For Third-party sale (strategic or financial buyer) High Low or none Full gain taxed as ordinary income up to 9.85%, and a 1% surtax on net investment income above $1 million can push the effective rate on a large gain above that top rate Owners selling into Minnesota’s med-tech and manufacturing buyer base, including strategic acquirers and private equity Family or internal succession Low to moderate, often staged Moderate to high during transition Minnesota’s $3 million estate tax exemption is not portable between spouses, though a qualified small business deduction can exclude a portion of a qualifying business interest from the taxable estate Family owners planning around both the exemption and the business-interest deduction Employee Stock Ownership Plan (ESOP) Moderate Fades over time Federal tax deferral under IRC Section 1042 is especially valuable here, since a share sale would otherwise face Minnesota’s ordinary income rates Owners of high-margin Minnesota businesses who want liquidity without a full sale to an outside buyer Management buyout (MBO) Low to moderate Low after transition Seller notes are common; Minnesota’s tax on the gain often pushes sellers to spread payments across years A team already deep in the technical or clinical side of the business, the kind of specialized knowledge Minnesota’s medtech and healthcare sectors depend on Choosing the Right Exit Route in Minnesota Most owners are quietly ranking the same short list of priorities: top dollar, family continuity, taking care of a loyal team, or a deadline that has nothing to do with the market. Minnesota’s tax rules shape that decision on two separate fronts. On the income side, the state taxes the gain on a sale as ordinary income at rates up to 9.85%, and a 1% surtax on net investment income above $1 million can push the effective rate on a large gain even higher, in some cases above the state’s own top rate on wages. On the estate side, any plan to keep the business in the family should account for Minnesota’s separate $3 million estate tax exemption, which is not portable between spouses. Minnesota also offers a qualified small business deduction that can exclude a portion of a qualifying business interest from the taxable estate, provided the owner meets specific ownership and participation requirements. For a family

In Florida, business exit planning means helping an owner build a company that can change hands on their terms, whether that happens in two years or ten. For advisors, three things are in play at once: Florida’s economy is a genuine mix, and business value reflects it: tourism, real estate, healthcare, and a fast-growing finance sector concentrated in Miami Working within a tax structure that has no personal income tax and, unlike many no-income-tax states, no separate state tax at all on S corporations, LLCs, and other pass-through entities Reading a buyer market being reshaped in real time by hedge funds, private equity firms, and corporate headquarters relocating to South Florida Buyer demand and valuation pressure in Miami bear little resemblance to what an owner in Tampa or Jacksonville sees, and that gap alone can shift when and how a sale gets done. None of that happens by accident, which is why so many advisors start with BEI’s business and exit planning programs before layering on the CExP™ certification for clients who expect a documented process. Key Takeaways for Florida Advisors Florida has no personal income tax, and unlike most no-income-tax states, it also does not tax S corporations, LLCs, or other pass-through entities at the state level, so many owners see no state-level tax at all on the gain from a sale. Florida has about 3.5 million small businesses, roughly 99.8% of all businesses in the state. Nationally, more than half of business owners are now 55 or older, according to U.S. Census figures, and most have no formal exit plan, so a large share of Florida owners will be heading toward a transition over the next decade. Most successful Florida exits start three to five years before the owner leaves. That head start is what makes it possible to raise value, build a management team, and plan around taxes instead of reacting to them. Exit planning membership and exit planning training together give advisors a way to serve Florida’s fast-growing, in-migrating client base without reinventing their approach each time. Florida’s tax rules and insurance landscape don’t sit still, which is exactly why continuing education stays part of an advisor’s routine. What Is a Florida Business Exit Plan? A Florida business exit plan pulls several kinds of advice into one plan built around a single owner’s goals. In practice, that usually means working through: Establishing what the business is actually worth now, not what the owner hopes it is worth Working out what financial independence looks like for this owner specifically, not a generic number Deciding who takes over, and building a transition plan that actually gets them there Planning around Florida’s corporate income tax if the entity is a C corporation, since pass-through owners face no state tax on the gain at all Factoring in what the owner actually wants: when to go, what life looks like after, and what legacy matters Keeping the owner’s goals at the center does one important job: it stops the plan from turning into a stack of disconnected recommendations. Many advisors also pull labor and wage figures from the Florida Department of Economic Opportunity to check workforce availability and local conditions that affect both timing and value. Common Exit Strategies for Florida Businesses Advisors in Florida tend to look at four main ways an owner can leave. Each one trades off differently on cash at closing, how much control the owner keeps, and how the deal gets taxed. The right fit depends on the owner’s goals and on the business itself. Exit Strategy Liquidity at Close Owner Control After Key Tax or Structural Consideration Often Best Fit For Third-party sale (strategic or financial buyer) High Low or none No personal income tax on the gain; Florida’s corporate income tax applies only to C corporations, so most pass-through sellers owe no state-level tax on the sale at all Owners selling into Miami’s fast-growing pool of hedge funds, private equity firms, and relocating corporate buyers Family or internal succession Low to moderate, often staged Moderate to high during transition No state estate or inheritance tax; a business that owns real estate should factor rising, still-volatile property insurance costs into what the transfer is really worth Family operations, especially ones with real estate exposure, where continuity matters more than maximizing the exit price Employee Stock Ownership Plan (ESOP) Moderate Fades over time Federal tax deferral under IRC Section 1042 works cleanly here since there is no state tax layer to coordinate around Owners in a people-intensive business, like hospitality or healthcare services, who want to reward the team that stayed through the growth years Management buyout (MBO) Low to moderate Low after transition Seller notes are common; with no state income tax on the gain, the after-tax math is simpler than in most other states A team already handling day-to-day operations at a hospitality, healthcare, or logistics business, common across Florida’s service-heavy economy Choosing the Right Exit Route in Florida The route an owner picks usually traces back to one dominant motive: cashing out at the highest number, keeping the business with the family, taking care of a loyal team, or simply being done by a certain point. Florida’s tax structure keeps that decision comparatively simple on the income side. With no personal income tax and no state-level tax on pass-through entities, the federal analysis, capital gains treatment, entity structure, and timing of the closing, usually drives the outcome far more than anything Florida itself imposes. Where Florida planning earns its keep is on the asset side. A business that owns its building or other real estate has to account for property insurance costs that rose sharply for several years and remain a real factor in buyer due diligence even as the market stabilizes. Buyers increasingly ask about a property’s insurability, its wind mitigation features, and its coverage history before they finalize a price, so an owner who addresses those items ahead of a sale tends to avoid last-minute renegotiation. Florida Tax and Legal

In New York, business exit planning means helping an owner build a company that can change hands on their terms, whether that happens in two years or ten. For advisors, three things are in play at once: New York is really two economies for valuation purposes: the concentration of finance, professional services, and media in New York City, and a distinct upstate economy built on healthcare, manufacturing, and life sciences Navigating a combined state and New York City income tax that can reach nearly 14.8% on the gain from a sale, with no discount for how long the owner held the company Reading a buyer market that is exceptionally deep in Manhattan’s finance and media sectors but thins out considerably once a business sits outside the metro area Manhattan and Buffalo might as well be different states when it comes to buyer demand, labor costs, and valuation pressure, and that gap shapes both the timing and the terms of a sale. Given how many moving parts that involves, most advisors don’t try to build their process from scratch. BEI’s business and exit planning programs lay the groundwork, and the CExP™ certification signals that an advisor has mastered it. Key Takeaways for New York Advisors New York State income tax runs through nine brackets to 10.9%, and owners who live in New York City add up to 3.876% more, for a combined marginal rate near 14.776% on the gain from a sale, among the highest of any state. New York has about 2.4 million small businesses, roughly 99.8% of all businesses in the state. Nationally, more than half of business owners are now 55 or older, according to U.S. Census figures, and most have no formal exit plan, so a large share of New York owners will be heading toward a transition over the next decade. Most successful New York exits start three to five years before the owner leaves. That head start is what makes it possible to raise value, build a management team, and plan around taxes instead of reacting to them. New York advisors often lean on exit planning membership for the software and community, then round it out with exit planning training focused on execution. Because the estate cliff and combined tax rates change with legislation, continuing education is how advisors keep their footing. What Is a New York Business Exit Plan? A New York business exit plan pulls several kinds of advice into one plan built around a single owner’s goals. In practice, that usually means working through: An honest valuation baseline, plus the operational changes that would lift it before a sale A post-exit income plan that confirms the owner can actually afford to leave An ownership and succession structure built around the owner’s real goals for the company Planning around New York’s combined state and city income tax, and the estate tax cliff if the business will pass to family What the owner actually wants their life and the company’s legacy to look like once they’ve stepped away Keeping the owner’s goals at the center does one important job: it stops the plan from turning into a stack of disconnected recommendations. Many advisors also pull labor and wage figures from the New York State Department of Labor to check workforce availability and local conditions that affect both timing and value. Common Exit Strategies for New York Businesses Advisors in New York tend to look at four main ways an owner can leave. Each one trades off differently on cash at closing, how much control the owner keeps, and how the deal gets taxed. The right fit depends on the owner’s goals and on the business itself. Exit Strategy Liquidity at Close Owner Control After Key Tax or Structural Consideration Often Best Fit For Third-party sale (strategic or financial buyer) High Low or none Full gain taxed as ordinary income; New York City residents add up to 3.876% on top of the state’s rate, for a combined marginal rate near 14.776% Owners selling into New York City’s uniquely deep concentration of Fortune 500 and financial buyers Family or internal succession Low to moderate, often staged Moderate to high during transition New York’s estate tax cliff can eliminate the entire $7,350,000 exemption if the estate exceeds it by more than 5%, taxing the full estate from the first dollar Family transfers that need to plan well ahead of the cliff threshold Employee Stock Ownership Plan (ESOP) Moderate Fades over time Federal tax deferral under IRC Section 1042 is especially valuable here, since a share sale would otherwise face New York’s combined state and city ordinary income rates Owners of high-margin New York businesses who want liquidity without a full sale to an outside buyer Management buyout (MBO) Low to moderate Low after transition Seller notes are common, and given how steep the combined state-and-city bite can be, spreading the gain across tax years is often worth the added complexity Owners with a capable management team in a state where financing a buyout carries real tax and interest-rate weight Choosing the Right Exit Route in New York The decision usually comes down to one dominant priority: the highest number at closing, keeping the company in family hands, taking care of longtime employees, or a date set by something other than the tax calendar. New York’s tax rules shape how that route gets carried out on two separate fronts. On the income side, the state taxes the gain on a sale as ordinary income, and owners who live in New York City add the city’s own tax on top, pushing the combined marginal rate to nearly 14.776%, among the highest in the country. On the estate side, any plan to keep the business in the family has to steer clear of New York’s estate tax cliff, since crossing just 5% above the $7,350,000 exemption can expose the entire estate to tax rather than only the amount over the line. Because these two layers work independently, a New

In California, business exit planning means helping an owner build a company that can change hands on their terms, whether that happens in two years or ten. For advisors, three things are in play at once: What drives value in a California business depends on its industry cluster, whether that’s Bay Area technology, Central Valley agriculture, or Los Angeles entertainment Working within a state tax structure that taxes the full gain on a sale as ordinary income, at rates that reach 13.3%, with no break for how long the owner held the company Reading a regulatory and buyer landscape that shifts by sector, from new limits on private equity in healthcare to the deep strategic and venture-backed buyer pools in technology and biotech A business in Los Angeles competes for buyers under very different conditions than one in the San Francisco Bay Area or San Diego, and that difference alone can move both the timeline and the price. Coordinating around it is where a structured process earns its keep: BEI’s business and exit planning programs give advisors that starting point, and the CExP™ certification builds on it for those who want to go deeper. Key Takeaways for California Advisors California has one of the heaviest personal income tax structures in the country, and it gives capital gains no break. The gain on a business sale is taxed as ordinary income at rates that reach 13.3%, which makes state tax a first-order concern in almost every deal. California has about 4.3 million small businesses, roughly 99.8% of all businesses in the state and more than anywhere else in the country. Nationally, more than half of business owners are now 55 or older, according to U.S. Census figures, and most have no formal exit plan, so a large share of California owners will be heading toward a transition over the next decade. Most successful California exits start three to five years before the owner leaves. That head start is what makes it possible to raise value, build a management team, and plan around taxes instead of reacting to them. Advisors get both software and community through BEI’s exit planning membership, plus the reps to apply it well through exit planning training. California’s rules shift often enough that continuing education isn’t optional, it’s how advisors stay useful to clients. What Is a California Business Exit Plan? A California business exit plan pulls several kinds of advice into one plan built around a single owner’s goals. In practice, that usually means working through: A clear-eyed read on current business value and the specific levers that could raise it Mapping the gap between sale proceeds and what the owner actually needs to retire comfortably Structuring the transfer of ownership around what the owner actually wants for the business’s future Planning around California’s ordinary-income treatment of the gain, since the state gives no discount for a long holding period Personal timing and legacy priorities that shape when, and how, the owner actually leaves Keeping the owner’s goals at the center does one important job: it stops the plan from turning into a stack of disconnected recommendations. Many advisors also pull labor and wage figures from the California Employment Development Department to check workforce availability and local conditions that affect both timing and value. Common Exit Strategies for California Businesses Advisors in California tend to look at four main ways an owner can leave. Each one trades off differently on cash at closing, how much control the owner keeps, and how the deal gets taxed. The right fit depends on the owner’s goals and on the business itself. Exit Strategy Liquidity at Close Owner Control After Key Tax or Structural Consideration Often Best Fit For Third-party sale (strategic or financial buyer) High Low or none Full gain taxed as ordinary income up to 13.3%; asset vs. stock structure carries more weight than in a no-income-tax state Owners selling into California’s deep strategic and private-equity buyer pool who want maximum value Family or internal succession Low to moderate, often staged Moderate to high during transition No state gift or estate tax, but Proposition 19 can trigger a full property tax reassessment on real estate the business owns Family owners weighing how to protect the business from a sudden jump in property tax Employee Stock Ownership Plan (ESOP) Moderate Fades over time Federal tax deferral under IRC Section 1042 is especially valuable here, since a share sale would otherwise face California’s full ordinary income rate Owners of high-margin California businesses who want liquidity without a full sale to an outside buyer Management buyout (MBO) Low to moderate Low after transition Seller notes are common; California’s tax on the gain often pushes sellers to spread payments across years Owners with a capable management team in a state where financing a buyout tends to cost more than elsewhere Choosing the Right Exit Route in California Owners choosing a route in California are weighing the same handful of goals as anywhere else: price, family continuity, rewarding employees, or a firm exit date. California tax rules then shape how that route gets carried out. Because the state taxes the gain on a sale as ordinary income at rates up to 13.3%, with no lower rate for a long holding period, the state tax outcome pulls hard on structure. That puts extra weight on choices like an asset sale versus a stock sale, whether the owner spreads payments out through an installment sale, and how the timing falls across tax years. Spreading a gain can also keep a seller under the $1 million mark where an extra 1% surcharge kicks in. In a state with no personal income tax, the federal analysis would settle most of these questions. California is the opposite, so the after-tax result is worth modeling early rather than at the closing table. One California specific point catches founders off guard: the state does not match the federal qualified small business stock exclusion under Section 1202, so gains a founder

In Texas, business exit planning means helping an owner build a company that can change hands on their terms, whether that happens in two years or ten.