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A VIRGINIA TAX MINUTE

A VIRGINIA TAX MINUTE:

WHY CAN VIRGINIA PRINTERS REPORT DIFFERENT SALES NUMBERS FOR SALES TAX AND BPOL TAX PURPOSES?

 

The Issue:   A PGAMA member in Virginia recently received an inquiry from its local Commissioner of the Revenue inquiring why the printer had reported different sales numbers for business, professional and occupational licensing (“BPOL”) tax and Virginia sales tax purposes.  The Commissioner of the Revenue had checked state sales tax records for the same period and apparently had discovered a fairly substantial difference.

The Answer:  Section 58.1-3703(C)(4) of the Code of Virginia provides that a city or county may not impose a BPOL tax “on a manufacturer for the privilege of manufacturing and selling goods, wares and merchandise at wholesale at the place of manufacture.”  Printers are manufacturers; many Virginia printers have only one place of business from which the sales are made and, accordingly, are entitled to exclude “wholesale” sales from the sales amounts reported to the locality for BPOL tax purposes.  The term “wholesale” for purposes of the BPOL statute encompasses more than the customary sale-for-resale notion (found in the Virginia sales and use tax statute), also including sales to institutional, commercial, industrial and governmental users which because of the facts and circumstances surrounding the sale such as the quantity, price and other terms, indicate such sales are consistent with sales at wholesale.  In many cases a large portion of a printer’s sales will fall into this category, permitting the printer to exclude such sales from BPOL reporting.  Note that sales to individual consumers must be reported because these sales would not fit within the definition of “wholesale” sales for BPOL tax purposes.  

The Suggestion:  Virginia printers should examine their reports of sales for Virginia sales and use tax purposes and compare the reports with the sales amounts reported for local BPOL tax purposes.  If the numbers reported for the same period are identical (or close) the printer in all likelihood is paying too much in BPOL taxes and should take this matter up with the person responsible for submitting the reports.  You probably will not get rich over the savings, but you can avoid paying more BPOL tax than is owed.  

OSHA Injury Reporting Due December 1, 2017

 

In May 2016, OSHA published its new recordkeeping rule, officially named “Improve Tracking of Workplace Injuries and Illnesses.” The rule dictates that employers with more than 20 full-time employees, including printing operations, must submit their work-related injury and illness records from their completed 2016 OSHA Form 300A to a new OSHA website. OSHA has stated that once the data is collected they will publish the data on its web page.

The submission deadline originally was set for July 1, 2017, but was delayed to December 1, 2017. Although OSHA has stated that they want to revise the rule prior to the December 1, 2017, deadline, at the time of this email they have not issued and changes. Therefore, printing operations with more than 20 full-time employees should plan on meeting the December 1, 2017, deadline.

In order to accept the data, OSHA created the Injury Tracking Application (ITA). The Web-based form allows employers to electronically submit required injury and illness data from their completed 2016 OSHA Form 300A. The application will be accessible from the ITA webpage at https://www.osha.gov/injuryreporting/index.html.

The data submission process involves four steps:

  1. Creating an establishment
  2. Adding 300A summary data
  3. Submitting data to OSHA
  4. Reviewing the confirmation email.

The secure website offers three options for data submission. One option will enable users to manually enter data into a web form. Another option will give users the ability to upload a CSV file to process single or multiple establishments at the same time. A third option will allow users of automated recordkeeping systems to transmit data electronically via an application programming interface (API.)

In order to demonstrate that you have met the new reporting requirement, you should keep copies of all of the electronic correspondence from OSHA.

 If there is a further delay of the reporting deadline or a change in the regulation, we will let you know.

If you have any questions, please let us know. Due to the Thanksgiving holiday, please send an email to This email address is being protected from spambots. You need JavaScript enabled to view it.

PIA Applauds House Passing of HR 1

Monday, November 20, 2017

Pittsburgh, Pennsylvania – Printing Industries of America applauds the United States House of Representatives on its passage of HR 1 “Tax Cuts and Jobs Act” yesterday November 16, 2017. The bill, which passed 227-205, is a comprehensive tax reform set to benefit the nation's economy. 

“Printing Industries of America was pleased that lawmakers recognized the importance of advertising by preserving the more than 100-year-old deduction for companies to promote their products and services,” said Michael Makin, President and CEO of Printing Industries of America. “We now turn to engaging with the US Senate to represent printers of all sizes as that chamber moves forward on its version of tax reform.”

Printing Industries of America member companies, their employees, and industry stakeholders would benefit in particular from HR 1 in the form of:

  • Lowering of the corporate rate to 20 percent, and, most importantly, lowering of S-Corp or “pass through” tax rate to 25 percent. The vast majority of Printing Industries of America members would be filing at this new, proposed 25 percent rate
  • Immediate and full expensing of capital equipment
  • Doubling of the estate or “death” tax exemption to $10 million with eventual full repeal in six years. This new exemption rate would remove the current estate tax planning burden and succession challenges for 99 percent of the hundreds of family-owned printing companies
  • Protecting the ability of small businesses to write off interests on business loans
  • Elimination of the Alternative Minimum Tax (AMT)
PIA will continue to monitor the progress of tax reform and inform its members as developments are announced.

2017 Holiday Closing Survey Results

Every year, we publish survey results showing member company closing schedules for the holiday season. Participation is the key to making this information meaningful.  Thank you to all 29 member companies who participated.

Thanksgiving

Thanksgiving Day: 90% closed, 97% with pay

Day After Thanksgiving:  83% closed, 83% with pay

Christmas

Friday, December 22:  17% closed, 28% with pay

Monday, December 25:  90% closed, 93% with pay

New Year’s

Friday, December 29:  7% closed, 15% with pay

Monday, January 1:  90% closed, 93% with pay

Holiday Shutdown between Xmas & New Years: 27% closed, 8% operating with skeleton crew

Dynamic Ratios Calculator

Dynamic Ratios Calculator

Interested in understanding how you stack-up as compared to industry averages?

Click here to use the calculator to compare yourself versus others based on information tabulated by Printing Industries of America in the annual Dynamic Ratios Study.

Try the calculator now

©2017 Printing Industries of America - all rights reserved.

Scam Alert

Be on Alert

Email scam:  Your finance director receives an email from you, the owner, telling them to pay a large invoice, presumably for an equipment purchase. The email has your email address and signature exactly.  It looks like any other email you'd send.  The email asks the finance director to pay the invoice immediately because it's holding up the process.  

This happened yesterday to a PGAMA member. The invoice was for $42,800.  

Fortunately, the member caught the scam in time.  Please put a system in place to guard against this scam. This is the second incident amongst our membership.  Questions?  Contact This email address is being protected from spambots. You need JavaScript enabled to view it. 410-319-0900

2017 MIS Survey

The 2017 Survey of Management Information Systems is completemarking the twelfth consecutive year we have produced this free, useful guide for members. The survey results are compiled from questionnaires sent to MIS software vendors, documenting the functionality, cost, and other pertinent information for the vast majority of software packages. This year’s edition features 45 software solutions.  Members can contact This email address is being protected from spambots. You need JavaScript enabled to view it. for a copy of the survey

 

 

MD Governor Dumps Zero-Waste Guidelines

MD Governor Dumps Zero-Waste Guidelines, Calls Them ‘Burdensome & Poorly Devised’

July 5, 2017 by Jennifer Hermes

Maryland Gov. Larry Hogan has axed the zero-waste guidelines put into place by his predecessor that set a statewide diversion goal of 85% by 2040, saying the guidelines were “last-minute, ill-conceived and poorly devised.” Hogan says he will instead focus on a “common-sense, balanced approach to managing waste in Maryland,” reported the Baltimore Sun.

Hogan also said that the rules “created unnecessary hardships for local governments.” The zero-waste landfill rules were put into place by Gov. Martin O’Malley just days before he left office in 2015, in response to reports that people in the state were throwing away more trash than the typical American.

O’Malley had called it an “ambitious policy framework” that would create “green jobs and business opportunities,” as well as diverting more waste from landfill and significantly improving the state’s recycling rate. But Hogan, in doing away with his predecessor’s rules, called it “burdensome regulation.” He said the state would focus on more achievable recycling goals.

Most states have set either mandatory or voluntary recycling goals; the national recycling average stands at 35%. But some, like Colorado, have never set goals, which appears to seriously hamper recycling rates. In Colorado, for example, the statewide recycling rate stands at just 12%, according to a recent article in Waste 360.

While state-level support of waste and recycling goals can play a valuable role in the country’s progress toward zero waste and a truly circular economy, many cities are also taking a lead. Boston, for example, is planning to cut down its $37 million annual waste hauling costs by pursuing zero waste. The city hired a consultant who will conduct a study on existing waste management practices and ways to divert garbage away from landfills. At least two other cities, San Francisco and Los Angeles, have already adopted a zero waste policy and are working toward their zero waste goals; Los Angeles is using a new franchise system for waste, and New York is in the process of emulating it. Boston officials said they will be looking into that as well as any other option that could potentially be effective.

Source: https://www.environmentalleader.com/2017/07/md-governor-dumps-zero-waste-guidelines-calls-burdensome-poorly-devised/

OSHA Withdraws 2013 Fairfax Memo On Union Representatives

The Occupational Safety and Health Administration (OSHA) has officially rescinded its 2013 Walk-Around Letter of Interpretation commonly referred to as the Fairfax Memo. Under the 2013 interpretation letter, even just one employee could select an outside/non-employee union organizer to act as an “authorized employee representative” during an OSHA walk-around inspection at the workplace.

The letter was very controversial was challenged in 2016 when the National Federation of Independent Business (NFIB) filed suit to have it overturned. The case had not been fully resolved, but the withdraw of the 2013 letter prompted NFIB to drop their lawsuit.

OSHA withdrew the letter via a separate memorandum issued on April 28, 2017. In the memorandum, OSHA stated that due to the OSH Act’s regulations, specifically 29 C.F.R. 1903.8(c), the Fairfax Memo was no longer necessary. Specifically, OSHA explained that the regulation permits, where good cause is shown and where “reasonably necessary to the conduct of an effective and thorough physical inspection of the workplace,” an inspector may allow a non-employee third party to accompany them during an OSHA inspection.

The rescission of the Fairfax Memo does not mean that a union representative is not allowed to participate in OSHA inspections. If the employer’s employees are represented by a union, the union has a right to participate in the walk-around. If nonunion employees can show good cause and demonstrate that the non-employee union representative is “reasonably necessary” to the inspection, OSHA could still allow the union representative to participate. Since this is a tougher standard to meet, the number of instances where this situation would occur is expected to be low.

Hogan to Veto Paid Sick Leave Legislation

Governor Larry Hogan announced his intention to veto paid sick leave, or the Maryland Healthy Working Families Act. According to his remarks, he fully supports a paid sick leave measure, but not the one recently passed by the legislature. He reported his concerns about the effect on the small business community in Maryland and expressed his disappointment with the legislature’s failure to consider the paid sick leave legislation he introduced.

What happens next?

The Maryland General Assembly will likely override his veto at the next available opportunity. If there is a special session this summer, the veto may be overridden sometime in June, July or August and take effect January 1, 2018.

If General Assembly does not meet until the next session, a veto override will be one of the first items of business when the legislative session convenes beginning  January 10, 2018. The legislation will take effect once the veto is overridden.

Are there enough votes to override Governor Hogan’s veto?

Yes, the Maryland Healthy Working Families Act passed with veto-proof majorities in both chambers – but very narrowly in the Senate. Currently, the Democratic leadership has the votes to override and implement paid sick leave. However, we will be carefully monitoring potential membership changes and other policy developments over the interim that may affect a veto override vote.

Proposed Executive Action on Paid Sick Leave from Hogan Administration:

In response to his veto and to demonstrate his commitment to the issue, the Governor is also proposing three Executive actions regarding paid sick leave.

  1. A study to develop new recommendations on best practices for paid sick leave.
  2. An Executive Order granting paid sick leave to all state employees (both contract and non-contract), resulting in 8,000 more individuals receiving the benefit.
  3. An order that all procurement officers give preference to all companies that offer paid sick leave.

OSHA Rescinds Controversial Recordkeeping Requirement

On December 19, 2016, OSHA issued a final rule titled, “Clarification of Employer’s Continuing Obligation to Make and Maintain an Accurate Record of Each Recordable Injury and Illness.” See 81 FR 91792. The final rule, which became effective on January 18, 2017, resulted in various amendments to OSHA’s recordkeeping regulations clarifying that the duty to make and maintain accurate records of work-related injuries and illnesses is an ongoing obligation. The key aspect of the rule would have extended the statute of limitations from six months to five years as to when the agency can issue a citation for failing to record an injury or illness.

OSHA had previously lost this battle in court when the Circuit Court of Appeals for the D.C. Circuit in 2012 [AKM LLC d/b/a Volks Constructors v. Sec’y of Labor, 675 F.3d 752 (D.C. Cir. 2012)] denied their request to extend the statute of limitations. The court ruling negated the citation issued to a company for not keeping their records updated over a 5-year consecutive period. The OSHA statute states that OSHA cannot issue a citation beyond the 6-month statute of limitations as defined in the OSHAct, the legislation that created OSHA.

OSHA believed that it had the authority to extend the statute of limitations via rulemaking and issued its rule which became known as the “Volks” rule. The rule made recordkeeping requirements a continuing obligation and effectively gave OSHA the ability to issue citations to employers for failing to record work-related injuries and illnesses during the 5-year retention period, contrary to the 6-month limit.

On March 1, 2017 (Cong. Rec. pp. H1421–H1430), the House of Representatives passed a resolution of disapproval (H.J. Res. 83) of the rule under the Congressional Review Act (5 U.S.C. 801 et seq.). The Senate then passed H.J. Res. 83 on March 22, 2017. President Trump signed the resolution into law as Public Law 115–21 on April 3, 2017. Accordingly, OSHA is hereby removing the affected amendments to the recordkeeping regulations from the Code of Federal Regulations.

The final rule becomes effective on May 3, 2017.

Analysis

This rulemaking is significant in that it defines OSHA’s authority as to when they can cite a company for not keeping their injury and illness records (i.e. Form 300) current Companies with 10 or more employees are still required to keep and maintain 5 years of injury and illness data. The impact of the legislation and rule recession does not change this requirement. What the legislation did was say that OSHA could not cite companies beyond the 6-month statute of limitation for not keeping the records current. OSHA was citing and fining companies for not keeping the records current over the 5 year retention period.

Therefore, OSHA can cite you for not having the records. They can’t cite you for not keeping them current, past the 6 month deadline. Since there is a 7 day window to record an injury, the period of time a company could be cited for not recording an injury or illness is 6 months and 7 days.

In addition, there are NO revisions in this notice to the following controversial rules:

  • 1904.36 - Prohibition against discrimination (e.g. (post accident drug testing)
  • 1904.39 - Reporting fatalities, hospitalizations, amputations, and losses of an eye as a result of work-related incidents to OSHA
  • 1904.41 - Electronic submission of injury and illness records to OSHA (due to start on July 1, 2017)

Financial Performance Assessment Webinar

Financial Performance Assessment Webinar

Watch it here.  Printing Industries of America’s Center for Print Economics and Management has developed a new way for printers to assess their strengths and weaknesses and to obtain an action plan to improve their bottom-line performance. The key features of the new Financial Performance Assessment include:

  • A detailed comparison and analysis of the printer’s key performance metrics with profit-leading firms that are similar in size, business models, and printing processes.
  • A comprehensive variance analysis examining the underlying reasons for performance issues.
  • An action plan with recommendations for specific strategic management practices and operational improvements, such as lowering costs, saving resources, changing prices, and other actions to stop losses and increase sales and profits.
  • The findings are presented to management in both a detailed report to management and a web-based presentation to the printer’s management team.
  • On-going assistance and consultation as needed to help in the implementation of the action plan.
  • The research and analysis are conducted by Dr. Ron Davis, Senior Vice President and Chief Economist with over 28 years’ experience in financial analysis in the printing industry, and Tai McNaughton,  Economist at PIA.

2016 Frederick D. Kagy Education Award of Excellence Recipient

Printing Industries of America is pleased to announce that the Printing Technologies program of the Center of Applied Technology North (CAT-North) in Severn, MD has been awarded the 2016 Frederick D. Kagy Education Award of Excellence. The program is honored for its innovative approach to preparing students for entry-level positions in the printing industry. CAT-North is a public career and technology school in Maryland’s Anne Arundel County school system.

Accepting the award on behalf of CAT-North is Michael Born, who instructs the Printing Technologies program at CAT-North. Under his guidance, the program produces students with marketable skills in traditional offset printing as well as digital print technology. The hands-on approach of the program ensures that students are familiar with all operations of a printing company from file creation to job planning/estimating through final production and finishing. During Mr. Born’s tenure, enrollment in the Printing Technologies program has increased by 70%.

Mr. Born also employs inventive teaching practices such as the “Human Printing Press.” Students learn the features and functions of the components of a printing press and act out the printing process in order to envision the system as a whole. Another example includes having students interact with equipment and machinery on their first day of class. This allows students to have a powerful sensory introduction to the printing environment consisting of sound, motion, touch, and smell. The program taps heavily into industry support through its active advisory board.

“Mr. Born has turned the CAT-North program into one to be emulated,” said Gary Habicht, President of Printing Specialist Corporation. “The kids involved are enthusiastic and thoroughly engaged in what they are doing. You can feel the level of excitement in the classroom, as compared to a few years ago, when it seemed to be just another class.”

Mr. Born will accept the 2016 Frederick D. Kagy Education Award on behalf of CAT-North at the TAGA 2017 Annual Technical Conference on March 21, 2017 in Houston, TX. For information about the Frederick D. Kagy Education Award of Excellence, visit www.printing.org/printingindustryawards.

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