Posted by & filed under Legislative.

Purpose: This Informational Publication describes how materialmen may remit sales and use taxes on certain sales of building materials and services to real property as and when actually paid by the purchasers to whom the materialmen have extended credit, instead of remitting the full amount of tax at the time of the transaction as generally required by law.

 

Background: Generally, sellers of tangible personal property and taxable services must remit tax on the entire amount of the gross receipts from a transaction on the return for the period in which the transaction takes place. The pay-when-paid provision allows certain sellers of building materials and services related to these materials an exception to this general rule.

 

Definitions: A materialman, for the pay-when-paid provision, is a person who furnishes building materials or services to a contractor for the construction, raising, removal, or repair of a building or the improvement of real property. To be considered a materialman, a person must also be entitled under Chapter 847 of the Connecticut General Statutes to file a mechanic’s lien against the real property to ensure payment for the materials or services.

Building Materials means materials that are incorporated as an improvement or repair to real property. The term also includes tools and other items that are used to improve real property. The term contractor includes a general contractor, a subcontractor, a repairman, and a property owner acting as his or her own general contractor.

 

Qualifying for Pay-When-Paid Status: A person seeking Department of Revenue Services (DRS) permission to collect and remit sales tax on a qualifying transaction when actually paid by a contractor must file an application by July 1 of each year and demonstrate to the satisfaction of DRS that, in two out of the last four calendar quarters,

  • The seller was a materialman as the term is used in Chapter 847;
  • Thematerialmanis authorized under Chapter 847 to put a mechanic’s lien on real property; and
  • At least 50% of the materialman’s sales of building materials (not services) were to contractors.

DRS issues Form REG-20, Application for a Materialman to Remit Sales Tax Under the Pay-When-Paid Method. A materialman must file this application by July 1 each year in order to obtain pay-when-paid status. DRS will respond to a properly completed application with a letter authorizing the materialman to use the pay-when-paid method on qualifying transactions.

Deadline to Submit Application: DRS only accepts applications filed on or before July 1 of each year. The applications are considered timely filed if received, or if the date shown by the U.S. Post Office cancellation mark is, on or before this date.

Application for a Materialman to Remit Sales Tax Under the Pay-When-Paid Method 2015

DRS_ SN 2000(1), _Pay When Paid_ Method for Materialmen

Posted by & filed under Legislative.

After nearly six weeks of activity and multiple snowstorms, the pace at the Capitol is set to increase. Until now, most of the bills are merely “proposed” bills, which are concepts and not fully drafted. Committees are now starting to fully draft several of those, and more importantly, Governor Malloy will submit his budget proposal on February 18th.

Despite projected deficits that exceed $1.25 Billion per year, the Governor has promised not to raise taxes. He is also expected to announce a major transportation infrastructure initiative and a method of funding it. Other expected proposals in his budget may involve removing several sales tax exemptions and lowering the rate, and amending the system of taxing motor vehicles.

Besides the Governor’s budget, there are several issues of specific concern to LDAC members. HB 5117 and SB 887 involve mechanics’ liens. SB 887 is the Department of Consumer Protection’s bill. It would prohibit anyone who doesn’t have the required DCP license or registration from filing the lien/ Materialmen would not be affected. HB 5117 would change the time for filing from 90 days to 90 business days.

Two proposed bills HB 5262 and 6235 would increase the jurisdiction of Small Claims Court from $5,000 to $10,000 or $12,000.

As usual there is significant activity from the Labor Committee which include several bills that would increase payroll costs. HB 6784 would expand paid sick leave to companies with 10 or more employees, increase the amount of mandated leave from 5 to 7 days, include temporary and day workers and expand eligibility to those who worked only 120 days regardless of the number of hours.

SB 798 would require the provision of paid family and medical leave. The bill has not been fleshed out yet, but it is a major priority for organized labor.

Regarding unemployment compensation issues, the Department of Labor continues to consider ways to restore solvency to the Unemployment Compensation Trust Fund. Despite paying the highest FUTA taxes in the nation, the DOL would increase the taxable wage base from $15,000 to $26,000. LDAC is participating in a broad business coalition that will support HB 5851, which would restore solvency through a number of expense reduction measures. Those would include a one week waiting period, requiring claimants to post resumes on line, basing benefits on the annual salary, not the current two highest quarters.

Although Connecticut continues to consider a public sector retirement plan for private sector employees, legislation awaits the report of a consultant and action may be delayed this year.

Another study is being done on chemical road treatments used by the Department of Transportation. Evidence is that such chemicals are highly corrosive to vehicles and structures. The report is not due until July, so it is unlikely that any progress on this issue will come before the next legislative session.

In summary, without question, the budget debate will dominate the rest of the session. There will be major fights over spending and taxes. How the Governor can balance the budget without tax increases remains to be seen. Within the next few weeks, we will have a better picture of the fiscal issues that will affect LDAC members and which of the onerous labor / cost of doing business issues are the most serious.

Posted by & filed under Lumber Person of the Year.

2014 LDAC Lumber Person of the Year

Laurence Laureno

Sanford & Hawley, Unionville, Conn.

 

Larry Laureno began his 50-year career in the lumber and building material industry at Homestead Lumber in Stamford, Conn. Working summers while he was earning a B.A. from Boston College, he started off as an office clerk, then graduated to warehouse and lumberyard duty, first loading and unloading trucks, then making deliveries. His first full-time job was as a salesperson for Maher-Homestead in Greenwich, Conn., with his father as location manager—and his direct supervisor. Larry recalls fondly that “he was a man of few words in our family home, and as a boss, he was also a man of few words, letting his veteran salesmen guide me instead. But after a couple of years, he told me that ‘you will be a good salesman because of your perseverance if nothing else.’”

Working his way up the ladder of the industry, Larry also held positions at Batter Lumber in Suffield, Conn., where he worked with his brother Mike; Laureno Lumber & Millwork in Suffield, where he was co-owner and vice-president; and at Stevenson Lumber & Millwork in Suffield. He is now looking forward to retiring from Sanford & Hawley Inc. in Unionville at the end of 2014. Larry says, “Growing up, I didn’t know my brother Mike, who’s six years older than me, that well. I got to know him so much better working for him for seven years as a commissioned salesman at Batter Lumber. Finding ourselves out of jobs when the parent company, Triangle Pacific, reorganized, we formed a partnership to purchase the business and property of the lumberyard. With $205,000 of borrowed money from our families and with two brothers in the railroad re-load business, Mike and I went to Connecticut Bank & Trust and were successful in getting a revolving line of credit—contingent on putting up our homes as collateral! We launched Laureno Lumber & Millwork, Inc., on Sept. 7, 1977.” ” Our  partner  relationship  went  well  because  we  both  worked  hard  and  had  great  respect  for  each  other. ”

 

A deeply-rooted faith in God has guided Larry throughout his family life, education, and career. A graduate of not only BC but of the Archdiocese of Hartford Lay Ministry Formation program, he counts among his guiding principles a commitment to be a good husband, father, and grandfather; to be someone who makes a difference in the lives of youth in his parish; and to be honest with his customers. This commitment to his parish community is demonstrated by being a recipient of the God & Youth Award from the Archdiocese of Hartford.

Larry met his wife, Mary, at Stamford Catholic High School. They parted for a time after graduation, but reunited six years later and have now been married for 46 years. Larry counts Mary as his greatest blessing and looks forward to a continually growing relationship in retirement. Their family includes two sons, Larry Jr. and Michael, a daughter, Amy, and three grandchildren, Anthony, Marco, and Joseph.

A lifelong sports fan, from playing baseball as a kid to co-captaining his high school football team, Larry enjoys BC football, UConn women’s basketball, and New York Yankees baseball games. He plans to catch up on his leisure reading in retirement, with murder mysteries and espionage novels on the top of his book list.

Some final words of wisdom from our LDAC Lumber Person of the Year for 2014: .” It’s easy to understand why Laurence’s motto is, “If you want to achieve humility, measure a lot of millwork and trim!” “There’s a lot of stress in the retail building materials supply business, so I always love sharing a laugh with my customers and colleagues. We have to have some fun in this business!”

Posted by & filed under Legislative.

Lowe’s entered into a settlement in Northern California agreed to pay a $1.6 million due to a lawsuit alleging the inaccurate description of dimensional building products. Since the settlement was announced there has been questions concerning what our members need to do to make sure they are not sued for the same issue.

 

NRLA had the law firm of Bernstein Shur analyze the judge’s order on the settlement, the implications for retailers, and what it means for our members going forward.

Conclusion

If Lowe’s complies with the standards referenced above, and labels the product dimensions according to those conventions, there should be no violation of the Judgment. But, again, there is no guarantee that any jurisdiction will honor those exemptions. The Voluntary Product Standards are just that—voluntary—but compliance with those standards and labeling those products accordingly greatly reduces exposure. On the other hand, manufacturers, wholesalers, and retailers can further reduce exposure by always including actual dimensions even when products are labeled using nominal dimensions or manufacturers’ dimensional descriptions (remember, when Lowe’s uses popular or common labeling it already has to accompany such sales with actual dimensions).

The Judgment may strike many in the building products industry as extreme and devoid of common sense, but right or wrong, it has changed the conversation. The heart of the Judgment is that it is not a defense for a consumer products seller to claim “Everyone knows that ‘X’ Product does not really mean ‘X’ Product.”

All of the NRLA states have adopted the Uniform Deceptive Trade Practices Act, or equivalent statutes, which generally prohibit misleading descriptions of the characteristics or quantities of products. Even though many jurisdictions may end up rejecting the reasoning reflected in the Judgment, the cautious seller will take every reasonable opportunity to inform the consumer whenever there is an arguable gap between the labeling, packaging, and advertising of a product and the true characteristics of that product.

It should be noted that as more information has come to light this was not an issue of a single item or a single instance where Lowe’s was found to have dimensional lumber that was below accepted standards. The suit was not just because a 2×4 isn’t actually a 2×4 (nominal name), but because the dimensional lumber being sold was below standards repeatedly. The suit was filed under “misleading or deceptive practices” because the materials being sold were not acceptable for industry standards, not just because the nominal name did not match the true dimensions.

Below is the memo. We hope that this help answers questions that our members have. If you have any further questions, please contact me at either 518.880.6376 or jkeller@nrla.org.

NRLA – Memo Lowe’s Settlement on Dimensional Lumber

Posted by & filed under Membership.

The Lumber Dealers Association of Connecticut (LDAC) is in the early stages of developing a program with the idea of introducing new people to the Lumber Building Material (LBM) industry. LDAC will partner with members in the training and development of tomorrow’s LBM employees by offering financial assistance in the form of a one-time stipend, up to $2,500.00 to help off-set some of the costs associated with hiring and training.

Ideally, members should seek out individuals looking to enter in the building material industry to fill a specific job requirement who may not otherwise look to our industry for employment.

These individuals could be (however not limited to) high school or college students, trade school students. Members will submit a plan for hire and development of these candidates to LDAC for eligibility of the stipend.

There are limited stipends available. Stipend disbursement will be determined bt the association board based on merits of the submitted proposal. Employment proposals will be reviewed within 3-6 weeks of receipt.

This is a brand new program for which LDAC welcomes any comments or suggestions from dealers on how best to promote and administer the program. See below for proposal form, or contact CT Regional Director: Tammy Wandler-Ginexi at: tammy@nrla.org for questions or comments.

2014 LDAC Industry Recruitment Application

Posted by & filed under Legislative.

LEAD PAINT UPDATES

EPA Starts Lead Safe Logo Program

Contractors who have been certified under the Lead Renovation, Repair, and Painting (LRRP) rule are being encouraged to use a new logo that highlights them as an “EPA Lead-Safe Certified Firm.” The Environmental Protection Agency (EPA) campaign includes ads that encourage parents and those that care for children to “Protect Your Family. Look for the Logo.” The promotions also link to a database of local LRRP certified firms for homeowners to explore. More information can be found at EPA Lead Safe.

EPA Cracks Down on LRRP Rule in the Northeast

The EPA recently cracked down on companies for violations of the LRRP Rule. Four New England companies were fined between $2,200 and $30,000. This follows the recent fines where two firms paid a total of $14,455 for similar violations in Maine. Lowe’s also recently agreed to pay the largest civil penalty ever under the LRRP Rule, $500,000, to settle claims that its contractors in at least nine states (including Connecticut, New Hampshire, New York, and Vermont) violated the LRRP Rule with both paperwork and testing non-compliance.

EPA Releases New Specifications for ENERGY STAR Windows, Doors, and Skylights

The EPA released its final program requirements for ENERGY STAR Version 6.0 for residential windows, doors, and skylights. The final Version 6.0 specifications include significant improvements from earlier drafts that increase ENERGY STAR qualification requirements of windows, doors, and skylights, while keeping those products more affordable for homeowners. More information on the new specifications can be found at ENERGY STAR.

Clean Water Act

The EPA and the U.S. Army Corps of Engineers unveiled a proposed rule that could greatly expand federal regulatory jurisdiction over wetlands under the Clean Water Act (CWA). Some fear the greatly expanded jurisdictional tributaries, including ditches and any other man-made conveyance that drains or connects to water sources. While the EPA has strongly denied that is their intent, large opposition is forming to oppose this overreach and make the EPA redefine their intent.

CREDIT CARD STANDARDS – UPGRADES & CHANGES IN LIABILITY

As of October 1, 2015, merchants will be subjected to new credit card terminal standards – a shift from magnetic-stripe cards to chip-and-PIN cards. American Express, Discover, MasterCard, and Visa have all announced their plans to transition to the EMV system. While the new cards will feature chip technology, at this point the cards will not require PINs in the United States. Most merchants will still require a signature when the card does not require a PIN.

Compliance with EMV is not mandated for merchants and processers, meaning retailers are not required to upgrade their credit card terminals and systems to read chip-and-PIN cards; however, merchants who do not use the new terminals and software will be liable for any fraudulent purchases. At this point there does not appear to be a shift in liability for orders taken online, via mail, or over the phone, known as card-not-present (CNP) transactions.

A new credit card terminal with the chip reader costs approximately $40, but can cost as much as $100 if it comes with a PIN keypad. More information on EMV credit cards and machines can be found at: EMV Memo.

TRANSPORTATION & DRIVERS

National Registry of Certified Medical Examiners

Beginning May 21, drivers are required to receive a medical examination from a certified medical examiner. Certified medical examiners are listed on the National Registry. If your driver’s medical card expires May 21 or after, it is important that you check the National Registry to ensure that the medical examiner is certified. You do not need to send your driver for a medical exam until his or her card is about to expire. To find a certified medical examiner in your area, click here. The Federal Motor Carrier Safety Administration is still processing certification information; therefore the number of certified medical examiners in your area should increase over the next couple of months.

FMCSA Begins Deactivating USDOT Numbers of Carriers without Updated Registration

The Federal Motor Carrier Safety Administration (FMCSA) began deactivating the U.S. Dept. of Transportation (USDOT) numbers of motor carriers who have failed to update their MCS-150 registration information as part of the biennial requirement. FMCSA will continue to deactivate USDOT numbers for those who fail to update their MCS-150 forms within two months of their assigned biennial update deadline. Motor carriers, freight forwarders, and brokers who do not fulfill their biennial update requirement on time can face penalties of up to $1,000 per day with a maximum of $10,000 total in addition to having their operating authority deactivated. Motor carrier registration updates can be completed here.

OSHA UPDATES

Heat Exhaustion and Illness

With the summer months approaching, it is important for employers to make sure employees are taking the proper precautions to avoid heat exhaustion and heat-related illnesses. The Occupational Safety & Health Administration (OSHA) continues to run its “Campaign to Prevent Heat Illness in Outdoor Workers,” which includes a webpage and even a smartphone App. These are excellent tools to use for your outside workers, but it is important to remember that indoor workers can also suffer from heat-related illnesses in worksites that are not properly ventilated and cooled.

OSHA Proposes Rule Requiring Employers to Report Workplace Injuries and Illnesses

OSHA proposed a rule to expand the injury and illness reporting requirements for employers. The notice of proposed rulemaking requires electronic submission of these reports to OSHA. OSHA is proposing that establishments with 20 or more employees in certain industries with high injury and illness rates (including LBM dealers), be required to submit electronically their summary of work-related injuries and illnesses to OSHA once a year. OSHA plans to eventually post the data online.

AFFORDABLE CARE ACT

Delays in Small Business Health Insurance Exchanges and Employer Mandate for Some States

The Obama administration is permitting more than a dozen states to not implement part of the Affordable Care Act’s (ACA) small business health insurance exchange until at least 2016. The delays mean that small-business employees seeking to buy health insurance in the SHOP system will only have one option in those 18 states. The ACA intended to allow customers on the SHOP exchange to pick from a variety of options, but the rollout of that feature has been delayed several times. Included in the list of 18 states that received this delay were Maine, New Hampshire, and New Jersey.

Additionally, for companies that have 50 – 99 employees, the employer mandate is now delayed until January 2016 – when companies must either offer health insurance policies or pay a penalty. The mandate will still take effect in January 2015 for companies with 100 or more workers.

PCORI Fees Due by July 31, 2014

If you administer a self-insured group health plan or health reimbursement arrangement (HRA), you must file your IRS Form 720 with your Patient-Centered Outcomes Research Institute Fee (PCORI) by July 31, 2014. You can find the IRS Form 720, IRS Form 720 instructions, and information on PCORI fees at the included links.

NLRB RULINGS

The National Labor Relations Board (NLRB) has decided to abandon a rule requiring a new posting notice regarding employee rights to unionize. The NLRB issued the ruling in 2012, but courts have since overturned the rule and the NLRB decided not to appeal the decision to the Supreme Court.

NRLA and NLBMDA are members of a coalition representing companies suing the NLRB over this posting requirement. This is a great victory for businesses, and our members should be proud of their efforts to help defeat this rule.

Posted by & filed under Legislative.

Purpose: This Informational Publication describes how materialmen may remit sales and use taxes on certain sales of building materials and services to real property as and when actually paid by the purchasers to whom the materialmen have extended credit, instead of remitting the full amount of tax at the time of the transaction as generally required by law.

 

Background: Generally, sellers of tangible personal property and taxable services must remit tax on the entire amount of the gross receipts from a transaction on the return for the period in which the transaction takes place. The pay-when-paid provision allows certain sellers of building materials and services related to these materials an exception to this general rule.

 

Definitions: A materialman, for the pay-when-paid provision, is a person who furnishes building materials or services to a contractor for the construction, raising, removal, or repair of a building or the improvement of real property. To be considered a materialman, a person must also be entitled under Chapter 847 of the Connecticut General Statutes to file a mechanic’s lien against the real property to ensure payment for the materials or services.

Building Materials means materials that are incorporated as an improvement or repair to real property. The term also includes tools and other items that are used to improve real property. The term contractor includes a general contractor, a subcontractor, a repairman, and a property owner acting as his or her own general contractor.

 

Qualifying for Pay-When-Paid Status: A person seeking Department of Revenue Services (DRS) permission to collect and remit sales tax on a qualifying transaction when actually paid by a contractor must file an application by July 1 of each year and demonstrate to the satisfaction of DRS that, in two out of the last four calendar quarters,

• The seller was a materialman as the term is used in Chapter 847;

• The materialman is authorized under Chapter 847 to put a mechanic’s lien on real property; and

• At least 50% of the materialman’s sales of building materials (not services) were to contractors.

DRS issues Form REG-20, Application for a Materialman to Remit Sales Tax Under the Pay-When-Paid Method. A materialman must file this application by July 1 each year in order to obtain pay-when-paid status. DRS will respond to a properly completed application with a letter authorizing the materialman to use the pay-when-paid method on qualifying transactions.

Deadline to Submit Application: DRS only accepts applications filed on or before July 1 of each year. The applications are considered timely filed if received, or if the date shown by the U.S. Post Office cancellation mark is, on or before this date.

CT Pay-When-Paid Application 2014

CT Pay-When-Paid Method for Materialmen