The contract, awarded May 14, gives Clark and Kiewit the job of designing and building the 11.4-mile segment of the Silver Line with six stations from Reston through Dulles International Airport and to Ashburn.  The notice to proceed is anticipated to be in July 2013 and the project is expected to be completed in 2018.  Unlike Phase 1 of the Silver Line, Phase 2 will receive no federal funding for the project, and will be funded primarily by state and local governments.

To read more, please visit the original article.

The failure to apply this foundational sales and use tax concept had a costly result for a Virginia lessee in a recent ruling issued by the Virginia Department of Taxation (Virginia Public Document Ruling No. 13-41, 03/21/2013). The lessee was a hotel operator that leased the furniture, fixtures, and equipment associated with the hotels. The lessor acquired the assets and paid sales tax on the purchase of those assets. Thus, the lessor did not present a resale certificate to the vendor from which the assets were purchased, despite intending to resell (or lease) those assets to a third party. The lessor did not charge the lessee sales tax on the lease payments. The Department assessed the lessee for the unpaid sales tax on the lease payments. The taxpayer contested the assessment by arguing that it did not owe sales tax because the lessor had already paid the sales tax at the time of purchasing the assets.

The Department concluded that the lessor should have purchased the property for resale pursuant to a resale exemption certificate, and should have charged sales tax to the lessee. Unfortunately for the lessee, the Department also found that the lessee’s sales and use tax liability cannot be avoided because of the lessor’s noncompliance with the sales tax collection rules, as the legal incidence of Virginia’s sales tax is on the end purchaser. Finally, the fact that the lessor paid sales tax on the initial purchase had no bearing on the lessee’s lease payments also being subject to tax under the law.

The legal conclusion in this ruling was unfortunately correct, but the lack of an equitable result meant that the Commonwealth earned double the revenue.  Moreover, assuming that the lessor built in to the lease payments its cost of paying sales tax on the purchase, the lessee essentially paid sales tax twice. Granted, the lessor can file a refund and, if the lessee is lucky, receive a refund from the lessor. However, this after-the-fact option will entail making uneasy requests to the lessor that can hamper a future business relationship. Taking the additional time to get it right up front will avoid the pain felt by the taxpayer in this ruling and, more importantly, prevent the state from getting double the taxes.

For more information on your company’s sales and use tax obligations please contact your Aronson advisor or Michael Colavito at 301.231.6200.

Join Aronson LLC and Independent Benefit Services on May 8, 2013 for an informative presentation on the various provisions of healthcare reform that will have a profound impact on how healthcare is delivered and funded in the United States. Our experts will cover the major changes for 2013 and 2014, including new W2 reporting requirements, the Summary of Benefits and Coverage, The Employer Mandate, The Individual Mandate, and The Exchange.

Construction companies should be aware that two or more organizations that are a controlled group are treated as a single employer in the eyes of Health Care Reform, and the Employer Mandate may apply to smaller organizations if the aggregate count is over 50 full time equivalent employees.  This seminar will help you understand how an “employee” is defined under the law and how to count hours for part-timers to determine if they become benefits eligible under the law.

Thinking about terminating your group health plan and paying penalties to save money over offering coverage? Not so fast… we’ll share reasons why you may want to stay in the game!

At the conclusion of this event, attendees will have a clear understanding of:

• The Vision of Health Care Reform – What is changing in 2014
• The Employer Mandate – How to comply and analyze the financial impact
• Reporting Requirements – What you need to do
• The Health Care Reform Timeline – Important dates and deadlines

Our experienced panel will provide you with valuable information and materials to help you navigate these challenging compliance issues and conduct a Q&A session following the main presentation.

Panel:

• Lisa Scott, Director, Compliance & Communications, Independent Benefit Services
• Tim Cummins, Partner, Construction Industry Services Group, Aronson LLC
• Mark Flanagan, Director, Employee Benefit Plan Services Group, Aronson LLC

Despite the decrease in March, the fact that the score remains positive should be encouraging news to construction contractors, as this may indicate more work to bid on in the future.

To learn more about the most recent ABI score please read the AIA’s April 23rd press release.

The public-private partnership bill was initiated as a measure to help Maryland build capital projects by cutting through red tape, protecting state assets, and streamlining the teaming process.  State officials anticipate that these P3s will help create as many as 4,000 new jobs and ultimately account for up to 10% of Maryland’s $3.1M capital budget by attracting private investment opportunities for infrastructure projects.

Lt. Gov. Anthony Brown commented on the partnership iniative in a public statement:  “With passage of this legislation — which has the support of a broad coalition, including both the labor and business community — we’ve established a predictable, accountable, transparent, and streamlined process for future P3s. Our legislation will encourage additional private sector investment in Maryland and put more Marylanders back to work.”

Time will tell if P3 projects get some traction in Maryland and whether a positive impact is felt by Maryland construction businesses as opposed to out-of-state contractors.

The proposed budget contains two specific provisions that would greatly reduce the attractiveness of retirement plans to small businesses:

• An overall aggregate limit of approximately $3 million in retirement accounts. This limit is tied to the maximums allowed in a defined benefit plan and would be indexed annually. Once the limit is reached, additional contributions would not be permitted.
• The capping of retirement plan and IRA contributions at the 28% tax bracket, with taxpayers in higher brackets having their tax benefit reduced.

With more and more stories about the dire retirement prospects for many Americans, it is hard to believe that these provisions — or anything similar — will be passed by Congress. These types of provisions often cause business owners to reconsider the merits of offering a plan, ultimately hurting those who need the plan the most.

We seem to hear every day about the demise of the pension system and how all Americans will be responsible for accumulating assets for their retirement, but yet the government may enact provisions that inhibit our ability to do so.

If you should have any questions regarding these or any other retirement plan provisions in the Obama Budget, please contact Mark Flanagan of Aronson’s Employee Benefit Plan Services Group at 301.231.6257.

The recent trend seen in the ABI index should provide contractors hope in the coming months that there will be more work to bid on with a possible return of more profitable work.  Based on how this index works, the 3rd and 4th quarters of 2013 could be a time of growth for contractors.

To learn more about the most recent ABI score please read the AIA’s March 20th press release.

Attendees will learn how Revu saves time, reduces printing costs and improves project communication with PDF solutions designed for architects, engineers, construction professionals or any technical user.

To register for this event, please visit here.

Kermit Baker, the AIA’s Chief Economist, commented that “a continued reservation by lending institutions to supply financing for construction projects is preventing a more widespread recovery in the industry,” but that the ABI score is still the best sign that we will see an upturn in construction activity in 2013.

To read the full press release, please click here.

This report comes on the heels of significant interest in the ABI’s steady growth over the past six months.  In November 2012, the AIA reported that, despite the recent improvements in the economy, more than half of the responding firms cited coping with an unpredictable economy as one of their biggest concerns for 2013.  While experts are cautiously optimistic, most still have questions about how sequestration and the debt ceiling negotiations will affect construction in the coming year.

Bookmark The Construction Report or follow our RSS Feed to stay informed about the ABI and other important business topics.  Please contact Aronson’s Construction Industry Services Group at 301.231.6200 if you have questions about how these developments may affect your company.