Legal Updates

"Check your multistate tax liabilities," Chuck Zellmer interviewed by Smart Business Magazine

Check your multistate tax liabilities
Chuck Zellmer

Governments are looking to find new sources of revenue to hold their heads above water during troubling economic times or just to generate more income, and they are becoming more active in tracking down multistate and even multilocal tax liabilities.

“The states are becoming more and more active in making certain that the taxes they can charge are indeed charging,” says Chuck Zellmer, attorney for McDonald Hopkins LLC.

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"How recent oil and gas discoveries will impact Ohio businesses and landowners," Jeff Huntsberger interviewed by Smart Business Magazine

How recent oil and gas discoveries will impact Ohio businesses and landowners
Jeff Huntsberger interviewed by Smart Business Magazine

It was announced recently that the Utica Shale formation in Ohio is not only a source of natural gas, but oil as well. New technological advancements — especially in horizontal drilling techniques and the hydraulic fracturing of the shale (“fracking”) — along with the fact that the oil appears to be of high quality, is bringing drilling to Ohio a lot faster than originally thought.

“Drilling has been taking place in the Marcellus Shale in Pennsylvania and West Virginia for a while now,” says Jeffrey R. Huntsberger, a member of the Business Department and the Real Estate Practice Group at McDonald Hopkins LLC. “Geologists knew there was natural gas in Ohio’s Marcellus formations, but figured Ohio wouldn’t be as rich a source as Pennsylvania. All of that has changed now with the discoveries in the deeper Utica Shale formation. For example, the CEO of Chesapeake Energy Corp. recently said that his company expects to invest $10 billion per year in Ohio for the next couple of decades.”

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Section 106 obligations: reducing the affordable housing requirement – renegotiation or appeal

Over the last couple of years, it has become increasingly common for disputes to arise as to whether or not a proposed development would be viable if it is required to carry an affordable housing obligation that is consistent with local planning policy.  A recent Court of Appeal decision provides an interesting insight into how differences between local planning authorities and developers may be resolved and is likely to encourage developers to resist an authority’s demands and take their chances at appeal.  A subsequent decision of the High Court demonstrates, however, that it cannot be assumed that an affordable housing obligation can be reduced at a later stage even if planning policy has softened.

In Vannes KFC v Royal Borough of Kensington and Chelsea, the Court of Appeal was asked to consider the legality of a decision made by a planning inspector on an appeal brought by Vannes against a refusal of its application for planning permission.  There was no dispute that the proposed change of use from hotel to residential was acceptable but one of the key issues at the Inquiry was whether or not the developer should be required to provide some affordable housing either on site or by way of a financial contribution to the Council.

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Keep Calm And Carry On – Don’t Panic!

“Keep Calm And Carry On” was a poster produced by the British government early on during the Second World War.  It was intended as an exercise in morale boosting for the British public.  Seventy years on, the slogan finds itself at the centre of another battle in Europe, this time before the European Community Trade Mark office in Alicante.

In 2009, an entrepreneur by the name of Mark Coop started to produce a range of goods bearing the “Keep Calm And Carry On” slogan.  Starting with t-shirts, he rapidly expanded so as to include mugs, soft furnishings, cufflinks and now even produces deck chairs and chocolate bars all bearing the same phrase.  Mr Coop had the foresight to apply to register a community trade mark in a wide variety of classes.  As a result, Mr Coop acquired the exclusive right to apply the slogan to the goods for which the community trade mark was registered, and used his registrations to prevent anyone else from using the slogan on various products.

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IRS Announces the Voluntary Classification Settlement Program

Arnstein & Lehr attorney E. Jason Tremblay

E. Jason Tremblay

On the heels of the U.S. Department of Labor’s announcement that it was going to share independent contractor misclassification information with the Internal Revenue Service (“IRS”), the IRS recently announced the implementation of the “Voluntary Classification Settlement Program” (“VCSP”). The VCSP is intended to encourage employers who have misclassified workers, for a relatively small payment to the IRS, to reclassify those workers as employees for federal employment tax purposes. In effect, this allows employers to avoid all but 10% of the past employment tax liability that the companies would have owed for prior years. The IRS will also not conduct employment tax audits of the companies for prior years with respect to the classification of the workers.

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DOL Set to Share Employee Misclassification Information with the IRS and States

Arnstein & Lehr attorney E. Jason Tremblay

E. Jason Tremblay

In what appears to be another example of cracking down on the improper use of independent contractors, the U.S. Department of Labor (“DOL”) recently announced it is entering into agreements with the IRS, as well as some state agencies (including Illinois state agencies), to share information regarding employers who have improperly classified employees. The DOL maintains that these arrangements are necessary to share information and coordinate law enforcement with the participants to end the practice of misclassifying employees. However, it is clear that this collaboration has as much to do with enhancing the inflow of tax revenues as it does with protecting employees.

What this practically means for businesses is that if the DOL determines that an independent contractor is misclassified, it can share that determination and evidence with, for example, the Illinois Department of Employment Security or other state agencies, which could very well lead to additional investigations, fines, fees and liability upon the business beyond those by IDOL. In light of this, every company with a business model based, in whole or in part, upon the use of independent contractors should prepare itself for this new enforcement activity and immediately consult with an employment attorney to perform an audit of those workers.

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Out with the old and in with the new: Gadens’ Guide to State Significant Development in NSW (the replacement of Part 3A)

By Anthony Whealy of Gadens Lawyers, Sydney

We are now only days away from the start of critical new planning laws that will govern the assessment of all major development projects in NSW (State Significant Development), following the coalition government’s repeal of Part 3A of the Environmental Planning and Assessment Act shortly after the March election. Planning Minister Brad Hazzard recently said that he has already signed the new State Environmental Planning Policy (SEPP) and that it will commence this Saturday, 1 October. read more

 

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Benefits to first home buyers purchasing a newly constructed home

By Ros Forrest and Naomi Rothman of Gadens Lawyers, Sydney

With a focus on boosting new housing construction, the NSW Government recently released its Budget for 2011-2012.  read more…

 

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Security of payment alert: termination of building and construction contracts and the subsequent limitations on security of payment rights

By Scott Laycock and Stephanie Venuti of Gadens Lawyers, Sydney

The recent Queensland Supreme Court decision of Walton Constructions (QLD) Pty Ltd v Corrosion Control Technology Pty Ltd & Ors [2011] QSC 67 (Walton) arms respondents with an additional defence to payment claims and presents a new risk to claimants in further limiting their rights to pursue payment under security of payment regimes.  read more

 

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When It Comes to Non-Compete Agreements, It’s Best to Know Exactly What Your Company Is Acquiring

Restrictive covenants such as non-compete and non-solicitation agreements are frequently used in connection with acquisitions to protect the underlying value of the transaction. After all, an acquiring company typically values the target company based in part on the revenue it generates from its stable of customers. Therefore, the acquiring company often requires the target company’s employees to execute restrictive covenants that limit their ability to “jump ship” after the acquisition closes and erode the value of the transaction by luring away customers. Recently, the United States Court of Appeals for the First Circuit issued a decision which underscores the importance of carefully examining and understanding any restrictive covenant that may be acquired through a transaction.

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