Local Office Blogs

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July 30, 2013

Josh Finfrock, Manager in our Transfer Pricing division, gives insight into the best providers for your license, royalty or contractual data in part 1 of this 3-part blog series.

Companies, attorneys and consultants regularly seek the best source for performing searches and analysis involving license, royalty or other contractual arrangements. This data is key to making business decisions, helping benchmark, value or document royalty rates, fees or certain terms involved in these agreements. If companies, attorneys or consultants lack internal contracts they perform searches to identify external agreements between unrelated market participants for their own application. Usually these "examples" are applied in various business planning, transfer pricing, valuation or litigation support analyses. In the U.S., many providers are available to provide various levels of data access and/or analysis for varying fees.

The following three sources may be considered for identifying relevant license, royalty or contractual data:

1.   Legal Research Companies

These sources offer screening tools, typically based on "boolean" search logic, to search through available public company filings for exhibits, annexes or appendices that may contain relevant license, royalty or contractual agreements.

2.   Royalty Agreement Database Companies

Offering various levels of pre-screened and summarized content sourced from public filings or journal articles, Royalty Agreement Database Companies sell varying scopes of data access to summaries of publicly available data.

3.   Proprietary Databases

Developed by CPA, Law or Valuation firms, proprietary databases leverage collections of contracts and agreements assimilated from prior analyses. They are not accessible for a fixed fee as they are typically tied with professional service fees for analysis and/or documentation.

Trying to decipher between sources? Learn about the advantages and disadvantages to all 3 in our next blog post on license, royalty and contract searches.

July 26, 2013

Anna Howell, State and Local Tax (SALT) expert and segment leader in the Memphis office of CBIZ MHM, weighs in on the highly anticipated Marketplace Fairness Act and what it means for online shoppers. 

A significant piece to the proposed Marketplace Fairness Act, or S. 743, is Section 2(c) also known as the 'Small Seller Exception.' As we discussed in our last blog post on the topic, "Marketplace Fairness Act Gains Momentum - Part 1," the legislation requires all “remote sellers” (including online stores) earning $1 million in revenue or more to collect taxes for every state and jurisdiction where they have customers. Moreover, the Small Seller Exception exempts remote sellers who earn less than $1 million in out-of-state sales. This rule may be just a small note included in one of the six sections of the act, however it arguably has created the most discussion among small to mid-size business owners. 

Who qualifies for the 'Small Seller Exception'? 

According to Section 2(c), remote sellers that have less than $1 million in gross annual receipts from remote sales will qualify under the 'Small Seller Exception.' Independent vendors who use third-party sites, such as Etsy or Amazon, may view the cut-off of $1 million negatively because in order to use these sites they must pay transaction fees. Right now these fees are not being incorporated in the annual calculation.

How does a state choose their 'certified' software provider and do businesses have any say in the matter? 

Every state will be required to provide remote sellers with free software that calculates all taxes due. Under the Streamlined Sales and Use Tax Agreement (SSUTA), adopted by a total of 24 states, only 5 software providers are 'certified' to provide such a program. Those states that choose not to join the SSUTA will be provided an alternative process within the act. This option will contain five mandates which must be followed and implemented into the state's tax plan. One issue is that the software each state chooses will not be subject to a list of requirements, therefore creating multiple forms of software that collect tax. The lack of uniformity could become a logistical problem for small businesses if each state differs in their process of collection. 

If the law is passed, how much time separates enactment and enforcement?

If the bill is passed by the House and later becomes law, each state under the SSUTA will have to let their citizens know that it is going to begin enforcing this collection process. The state then must wait 180 days and start collection on the first day of the financial quarter. If a state is not listed under the SSUTA, it must provide legislation which meets all five mandate requirements under the second option of the act and begin enforcing this act after the 180 day period on the first day of the financial quarter. 

What are some of the revisions being discussed? 

Several lawmakers and companies have publicly voiced their opinion on the Marketplace Fairness Act. Some discussions around the act include making revisions to the current law before any further action is taken. One major concern is the administrative burden this tax would place on small businesses. Opponents to this rule, including eBay, argue that the exemption level is too low and propose $10 million should be the cut-off.

July 23, 2013

The National Association of Federal Credit Unions (NAFCU) is proposing to hold merchants accountable for data security breaches. The banking group recommends Congress create national standards for retailers and processors to uphold when they collect and process payment card data. The legislation would create uniform security practices for the protection of all financial information.  The NAFCU has been actively working to gain support for this issue.

Fred Becker Jr., President & CEO of the NAFCU,  described in a recent letter to Congressional leaders the organization's Five-Point Plan for Regulatory Relief. He notes:

"Our nation's credit unions are struggling under an ever-increasing regulatory burden that must be immediately addressed. A survey of NAFCU members late last year found that 94% have seen their regulatory burden increase....Credit unions, many of which have very small compliance departments, and in some cases only one compliance officer, must comply with the same rules and regulations as our nation's largest financial institutions that employ armies of lawyers."

The 5 points outlined in the plan include the following:

  • Administrative Improvements to the National Credit Union Administration (NCUA)
  • Capital Reforms
  • Structural Improvements
  • Operational Improvements
  • Data Security Reforms

For more information on the NAFCU's Five-Point Plan for Regulatory Relief click here.

Visit www.cbiz.com/pci for more information regarding CBIZ Security & Advisory Services, LLC and contact Karen Cassella (kcassella@cbiz.com), Executive Vice President, CBIZ SAS at (901) 685-5575 or email the CBIZ SAS team at pci@cbiz.com.

July 18, 2013

Anna Howell, State and Local Tax (SALT) expert and segment leader in the Memphis office of CBIZ MHM, weighs in on the highly anticipated Marketplace Fairness Act and what it means for online shoppers.

The tax man cometh, and he is heading for the Internet.

As we await a final decision from the House on the Marketplace Fairness Act, it is important to understand its significance for employers as well as individuals. The Marketplace Fairness Act, or S. 743, is a piece of legislation which passed the Senate in early May and is currently under consideration in the House of Representatives. It requires all "remote sellers" (including online stores) earning $1 million in revenue or more to collect taxes for every state and jurisdiction where they have customers.

Its movement to law will mean thousands of dollars in new revenue for each state, collecting sales tax from Internet shoppers who once avoided the additional fee by ordering online. As expected, the law is facing more opposition at this level and more discussion surrounding its contents has become prevalent not only to the lawmakers themselves, but also to the general public.

The bill would force shoppers to pay sales tax for the state to which they are having their items shipped. Currently, most online shoppers are subject to a self-reported Use Tax, which is typically the same rate of tax. As Tennessee Governor Bill Haslam has said, according to the Memphis Commercial Appeal, "It’s not a new tax; it’s a tax that is owed right now but that people aren’t paying.”

So, what does the Marketplace Fairness Act mean for you? Stay tuned as there is much more to come on this significant piece of legislation.

July 11, 2013

Are you trying to sift through countless articles about the employer mandate delay? Save yourself some time by reading this short Q & A with Steve Dunavant, Senior Managing Director of CBIZ MHM - Memphis. Steve weighs in on the large employer mandate delay and answers the questions employers and employees alike want answered.

1. What has been delayed and what has been excluded?

The employer shared responsibility penalty requiring companies with more than 50 full-time employees to provide health insurance to workers as well as an employer and plan reporting requirement have been delayed one year. For employer planning purposes, employers should know that all systems are "go," at least at the moment, for other requirements of the law. You can view our CBIZ Health Reform Bulletin for more detail.

2. Does the extension suggest that employers delay their own implementation efforts as it relates to the ACA's large employer provisions?

Employers were clearly struggling to digest the law and its guidance ahead of the former effective date. Similarly, the Government was experiencing its own difficulty in implementing the provisions as well and cited the information reporting requirements for large employers, insurers and self-insured health plans as the reason for the extension of the effective date. The additional time is clearly needed, and accordingly, employers should continue to evaluate and plan for implementation of the ACA provisions so that they are properly prepared in advance of the new effective dates.

3. Does this delay affect employees?

The delay of the employer mandate until 2015 does not change the effective date for the individual mandate. It is important to note that tax credits are available to individuals to assist with the purchase of health coverage. Those credits are only available to employed individuals who are either not offered health coverage by their employers or are offered coverage that is not affordable (i.e. costs more than 9.5 percent of employees income) or does not provide a minimum value (provides coverage for 60 percent of health care costs). Absent the employer reporting provisions, it is questionable how the Government will verify claims by employed individuals that coverage is not available, unaffordable or inadequate.

4. Does this delay affect employer planning?

Possibly, fewer employers may cut employee hours to below 30 hours/week (so as to classify them as part-time) because they will avoid being charged a penalty this year (see §4980H). Additionally small employers concerned about exceeding the 50 FTE threshold will have additional time to consider the impact triggering the ACA large employer provisions.

5. Will there be future delays for individuals?

Though there has been speculation about the Obama administration delaying further provisions of the Affordable Care Act, there has been no official correspondence about such delays. A recent GAO Report released this past June notes that "much remains to be accomplished in a relatively short period of time," and that significant implementation challenges remain.

July 9, 2013

The Memphis Business Journal has published the 25 names of the 2013 Super Women in Business. These women are honored as the city's most influential in business spanning different industries and holding key decision-making positions. They have achieved success through leadership in the workplace and community contribution.

To view the full list of 2013 Super Women in Business click here.

This group of Super Women is the second class selected by the Memphis Business Journal and will be honored at a luncheon August 29th at the Hilton of Memphis. We are proud to be a sponsor of these awards and congratulate the 25 women selected.

July 2, 2013

The Memphis office of CBIZ MHM kicked off its 'Summer Days of Service' by participating in the "Meals on Wheels" program through the Metropolitan Inter-Faith Association (MIFA) for its first volunteer day. Our community involvement committee coordinated the event and has planned several similar volunteer days throughout the summer for our employees. A group of 8 volunteers from our office helped deliver meals this past Friday.

Before heading out on three seperate driving routes for deliveries, the group attended an information session on MIFA's vison, values and mission. The association has grown tremendously since its founding in 1968. Several organizations have grown from within its walls, such as the Mid-South Food Bank, and expanded to other locations.  The MIFA "Meals on Wheels" program, with the help of up to 100 volunteers, provides 1,800 hot, nutritious lunches for homebound elderly and seniors at 22 congregate sites each weekday. This program is the organization's largest, and has been awarded the highest possible accreditation conferred by the Meals on Wheels Association of America.

For more information on our community involvement committee, click here. Further information about MIFA can be found at their website: www.mifa.org/.


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