Give to Live & Be the Inspiration for Positive Change

Inspiration for Positive Change

Friend of the firm, Arlene Cogen, has the #1 new release in Finance on Amazon – Give to Live: Make a Charitable Gift You Never Imagined.

“This is a love story about your finances, taking care of family and making a difference. Whether you are new to charitable giving or simply keen to improve your understanding of giving and philanthropy, this is your book. It will free you from the haze of the complicated jargon, break things down in understandable terms and share ways to effectively and meaningfully include philanthropy in your life.”

The paperback version will be out shortly. However, if you are too excited to wait, then you can download the Kindle version now for less than a dollar. Just think about what you can do with all of that money you’ll save – maybe add it to your charitable giving plans, right?

Victoria Blachly is a partner at SYK, and an experienced fiduciary litigator that works with many elderly clients, cases or causes. She is also a proud Board Member for the Oregon Alzheimer’s Association Chapter.

Life after Wayfair: Congress Steps In

We’re not ashamed to admit we’re a bit nerdy when it comes to tax matters. We always love talking/reading/studying (… eating/sleeping/living) tax and tax-related things. But even we think it’s been more exciting than usual in the world of state tax this summer!

The Supreme Court handed down its opinion in South Dakota v. Wayfair on June 21, 2018. You can see our initial attempt to summarize the opinion here. Immediately after that, there was a flurry of activity as each state tried to address implementation of the “new” regime that would allow them to tax out of state vendors of tangible personal property into their states. Our initial look at Washington’s and California’s responses is here. Since then, lawmakers in dozens of states have proposed or introduced versions of the South Dakota law that attempt to tax remote sellers.

The language of the Wayfair opinion raised all kinds of issues; ranging from what is the appropriate standard to when will retroactive tax legislation been permissible. There were also practical considerations involving when a marketplace facilitator will need to force sales tax collection and compliance. We’ve gotten a lot of questions this summer about what is really meant by minimum contacts.

One of the key points of the Quill opinion, which Wayfair overturned, was a suggestion that Congress act to address remote sales in an evolving economy. The Supreme Court in Wayfair lamented the fact that the US Congress had not acted in the 26 years since it decided Quill. The Court felt that Congress needed to act. Failing that, the Court decided that it could expand its understanding of what the Commerce Clause allowed states to tax by holding that Quill had been incorrectly decided.

On Friday, September 14, 2018, a bipartisan group of Representatives (Jim Sensenbrenner (R – Wisconsin), Anna Eshoo (D – California), Jeff Duncan (R – South Carolina), and Zoe Lofgren (D – California)) introduced the “Online Sales Simplicity and Small Business Relief Act.” (Interestingly, only Rep. Eshoo put a link to their statement on her congressional hompage – link above)  This fairly short bill, as introduced, has two major points and a “sense of Congress” statement.

I. The OSS/SBRA bans retroactive taxation of internet commerce

The proposed act bans states from compelling collection of sales tax for sales that occurred before the June 21, 2018 Wayfair opinion. It pairs this with a phase it that, in the initial draft, begins on January 1, 2019. This raises the question, of course, of what to do with sales that occur in the intervening period.

II. The “Sense of Congress” statement can be read to say “We don’t want to tell you (states) what to do but you’re making us do it”

The “Sense of Congress” statement essentially says that Congress really wants the States to develop an interstate compact that identifies a minimum substantial nexus, that simplifies registration and compliance, and that eliminates the need for the “Small Business” remote seller exemption.

III. The OSS/SBRA creates a rather large “small business” remote seller exemption

The proposed act also proposes to restrict States from collecting sales tax from customers that have $10 million in annual gross receipts during the preceding calendar year where: (1) the sale is made on or after June 21, 2018 and (2) before the date 30 days after the date where the States develop and Congress approves an interstate compact, applicable to the State and sale, “governing the imposition of tax collection duties on remote sellers.”

Setting aside the rather valid question/criticism of whether $10 million in gross receipts is a “small” business, it’s our thought that there is a question about whether purported requirement for Congressional approval of a multistate remote seller tax compact meets the criteria of Virginia v. Tennessee, 148 US 503 (1893), and it’s progeny. The Supreme Court in Virginia v. Tennessee, first articulated the idea that only agreements which would increase the power of the states at the expense of the federal government require Congressional approval.  It’s hard to see how federal sovereignty is imperiled by 45 different state approaches to Wayfair. Other tax compacts between the states, including the Multistate Tax Compact, have not received congressional approval. Therefore, it seems unlikely that the states who are struggling to address the application of Wayfair to their state tax collections will be thrilled about this bill as written.

We’ll keep you updated as this continues to evolve!

Valerie Sasaki specializes in jurisdictional tax consulting, working closely with Fortune 50 companies involved in audits before the Oregon or Washington Departments of Revenue. She also works with business owners on tax, business, and estate planning issues in Oregon or Southwest Washington.

Oregon Shifts Heavy Equipment Personal Property Tax Burden to Contractors starting in 2019

Large and small heavy equipment rental providers throughout the state of Oregon recently scored a huge victory when Governor Brown signed HB 4139 into law earlier last month.  The new law replaces Oregon’s existing personal property tax system for heavy equipment with a 2 percent tax on every heavy equipment rental transaction starting in 2019. While many states have either eliminated personal property tax or have exempted certain manufacturing and construction businesses from ad valorem property tax, Oregon was one of the few remaining that offered no relief or reform of any kind for heavy equipment rental providers.

Critics often cited the compliance costs associated with the business personal property tax as complex and burdensome in a way that discouraged many companies from accurately reporting. The old system was a location-based tax. This means that a company would be taxed on heavy machinery it owned based on where it was sitting on January 1 of that year. Heavy equipment rental businesses often rent their equipment out all over the state and beyond. Tracking location of constantly moving equipment for tax purposes proved difficult and also created the potential of requiring companies to pay additional tax in multiple counties or states on the same equipment where assessment dates varied.

Under the new law, the location-based tax goes away and now a sales or value-added tax of 2 percent will be collected by the heavy equipment rental business at point-of-sale and remitted to the Department of Revenue. The Department is authorized to use up to 5{45ef85514356201a9665f05d22c09675e96dde607afc20c57d108fe109b047b6} of the revenue for administrative costs needed to enforce the tax. The remaining money will distribute out to the local counties based on where each rental transaction occurred. This ensures that the heavy equipment rental businesses have a much simpler system for determining the tax they owe and local counties receive revenue based on the number of heavy equipment rental transactions occur within its borders.

Many surrounding states such as California and Idaho have adopted state and local sales taxes on similar transactions. Supporters of this change say this makes Oregon more competitive in the construction market and will attract more business in general to the state.

According to Section 3 of the new law, every heavy equipment provider will need to register with the Department of Revenue by December 15 of this year to certify that they qualify for the rental tax program and exempt them from the old ad valorem property tax system. The providers will then be required to collect the rental tax on each transaction and file a return each calendar quarter to report the tax due. The change is meant to be revenue neutral, meaning that the amount of monies paid under the new system should equal to what the providers would have been paid under the old system. Section 5 states that any amount paid by a qualified heavy equipment provider that exceeds the old tax threshold will receive a refund in the amount of the excess.

While overall this new change will likely benefit both providers and local counties alike, heavy equipment rental businesses may receive more of a windfall from this change than initially planned. This is a quirk of the Oregon law that is different from other jurisdictions. Based on how the new law is worded, the providers are tasked with merely collecting and ensuring the proper amount of tax is transmitted to the Department of Revenue. The incidence of tax is on the party renting the equipment. So, the renter will remit the new tax to the equipment rental company along with the rental price, and if the amount of tax exceeds the amount “paid” under the old system, then the providers will receive a refund of any excess.

Based on the wording of the new law, it does not appear the Oregon Legislature has thought about this windfall possibility. It remains to be seen whether any modifications to the law will address this potential for abuse. We understand that the Oregon Department of Revenue is currently working on regulations to administer this new assessment.

Valerie Sasaki specializes in jurisdictional tax consulting, working closely with Fortune 50 companies involved in audits before the Oregon or Washington Departments of Revenue. She also works with business owners on tax, business, and estate planning issues in Oregon or Southwest Washington.

Special thanks to guest SYK co-author Nicholas Rogers. Nicholas is a 3L and 2019 J.D. candidate at Lewis & Clark Law School.

Productive & Positive Planning for Aging: Check Your To Do List

Productive & Positive Planning For Aging

A recent article broke down the often daunting and ignored tasks that make for good planning decisions when you or a loved one ages – – well in advance of when one’s ability to make such decisions may be taken away by changing physical or mental health – or the involvement of a court, in some cases. The article breaks it down into three categories:

  1. Decision to Stop Driving

One hopes that with the proliferation of readily accessible pay-services for transportation, the decision to step away from the responsibility of driving may be easier to make than ever. Naturally, rural locations do not have the luxury of a taxi, Lyft, or Uber, so asking for a ride from friends or family must be considered. Evaluating this decision early is a better option than waiting until someone is harmed.

  1. Decision to Stay in Your Home

Along with the evaluation of financial restrictions and social aspects of one’s living arrangements, to make an educated decision as to whether aging in place where you currently live is viable, the National Association of Home Builders has a comprehensive checklist that walks you through many considerations for an appropriate living space. Again, looking through the list well in advance and considering options is much preferred over making hasty decisions under stressful circumstances.

  1. Decision to Take Care of Yourself

The expense of in-home care versus a facility or retirement community is a substantial consideration. The National Association of Area Agencies on Aging has done a lot of research that will help you evaluate viable options, with a comprehensive website where you can enter your city and state, or zip code, for valuable information and assistance.

As with many important decisions in our lives, knowledge is power, so arm yourselves accordingly. Naturally, the legal documents to effectuate your ultimate decisions are also a necessary part of the planning process, so make sure your estate planning attorney knows your plan, to make sure everything is in place to meet your legal needs.

Victoria Blachly is a partner at SYK, and an experienced fiduciary litigator that works with many elderly clients, cases or causes, she is also a proud Board Member for the Oregon Alzheimer’s Association Chapter.

Changing Your Name and Gender in Oregon

City Hall - Portland Pride - Gender Choice

Oregon is on the move to become a more transgender and non-binary friendly state.

In 2016, an Oregon judge allowed Jamie Shupe, a person who identified as non-binary, to change their identity to a neutral third gender. The judge’s decision to allow a non-binary gender is widely believed to be the first of its kind in the United States.

After this decision, Oregon gained momentum in creating a more streamlined process for those wishing to change their name and gender. Changing one’s name and gender previously was a complicated process. It often differed from county to county, and could not always be accomplished alone.

However, starting in 2017, the State of Oregon Judicial Department began providing statewide forms for both adults and minors who want to change their name and/or gender. The petition allows the applicant to decide whether they want to identify as male, female, or non-binary. The forms provide instructions for filling out a petition, as well as the cost and where it can be filed. Those forms can be found here: http://www.courts.oregon.gov/programs/family/forms/Pages/name-sex-change.aspx

No court order is necessary to change a gender indicator.

Additionally, as of July, 2017, the Oregon DMV also allows residents to change their gender marker to male, female, or a non-binary designation: “X.” To change a marker, an applicant will need to go to the DMV, and turn in a completed application with the desired indicator marked. They also are required to pay the renewal or replacement fee for their identification card. No court order is necessary to change a gender indicator. Please note that in order to change a name on a driver’s license or ID card, an applicant will need proof of a legal name change. One method of proof is to have a court order showing the legal name change. Forms and information can be found here: http://www.oregon.gov/ODOT/DMV/Pages/DriverID/chg_gender_designation.aspx

For those born in Oregon, there is also an administrative option for updating Oregon birth records to reflect accurate gender identity. This new option became available in January, 2018. It allows a one-time gender and name change without having to go through the courts. An applicant may request to be listed as male, female, or non-binary. An applicant will need to submit a notarized document, as well as a fee. For more information see: http://www.oregon.gov/OHA/PH/BIRTHDEATHCERTIFICATES/Pages/rules.aspx

With these changes, Oregon remains on the forefront of transgender issues. If you would like help in changing your name and/ or gender, contact a family law attorney.

Emily Clark is a litigator at Samuels Yoelin Kantor, with her practice centered around family law. Her passion is helping families navigate all the various obstacles they may face. Her practice focuses on domestic relations, probate, and business transactions.

Hands-Free Really Means Just That: Oregon Stiffens Ban on Distracted Driving

October 1, 2017, marks the start of stiffer fines and tougher penalties for distracted driving with cell phones.

Oregon had allowed limited use of smart phones while driving, but beginning October 1, it is now illegal for drivers to use or hold an electronic mobile device. You are allowed a single touch or swipe to activate or deactivate a device or function, but do not talk on speaker mode while holding your phone, or you could be looking at a fine of $130 to $1,000 for your first offense, $220 to $2,500 for your second offense and a minimum of $2,000 and up to 6 months in jail for a third offense.

This revision to Oregon law expands the distracted driving law from the existing ban on cellphones in the driver’s seat to include all electronic mobile devices. Phone calls are still allowed if the driver uses a hands-free device, such as a Bluetooth headset, or routing calls to the vehicles stereo system — but only if the phone is not in the driver’s hand. The law uses the phrase “mobile electronic device” rather than “communication device” to account for the array of modern devices and their uses, and specifies that “driving” includes idling in a traffic jam or at a light. A driver can only start using the device if the vehicles has “stopped in a location where it can safely remain stationary,” such as a parking space or pulled off to the side of the road.

There are some exceptions for things like medical emergencies and truck and bus drivers, but Oregon has made it clear that hands-free really does mean what it says.

2017 Chambers High Net Worth Again Recognizes SYK & Two of Our Partners

Stephen Kantor and Victoria Blachly

Friday, Chambers and Partners released their annual rankings for their Chambers High Net Worth publication. Chambers HNW is objective, independent and research-based; the guide recognizes the world’s leading high net worth advisers.

SYK is proud to again be recognized as a firm, as well as to celebrate the individual recognition received by SYK partners Steve Kantor – estate and tax planner extraordinaire – and Victoria Blachly – ferocious fiduciary litigator.

Cheers!

Dynasty Disasters – Intergenerational Wealth

The Pitfalls of Intergenerational Wealth & Business Management

Running an intergenerational family-owned company can be very challenging. How do you balance present family and lifestyle goals, with operating a successful and growing company? How do you choose what is best for the family and its individual members, while also considering the future and thinking ahead to the next generation of the business?

While some family business dynasties such as the Mars Candy company and the descendants of William Randolph Hearst continue to thrive, other dynasties have crumbled. Frances Stroh was born an heiress to one of the largest beer companies in America, Stroh Brewery Company. In her new book “Beer Money: A Memoir of Privilege and Loss” she writes about her wealthy family’s downward spiral leading to the loss of their approximately 130 year brewing legacy. Ms. Stroh documents the missteps an intergenerational family-run company can make which could result in its collapse.

In a New York Times article discussing Ms. Stroh’s book, they highlight some of the unique issues that arise in intergenerational wealth and business management. For instance, in the Stroh family they chose successors of business management positions along patriarchal family lines. Instead of including women family members and outside talent, they assumed male heirs would automatically be talented and qualified in running the business.

As the Stroh family multiplied, many of the heirs relied on large annual dividends to support lavish lifestyles. Even when business profits dwindled, the dividends to heirs continued, resulting in company principle being drained.

Struggles within the nuclear family also contributed to the collapse of Stroh Brewery Company. Ms. Stroh recalled her father’s alcoholism and her brother’s drug addiction, coupled with the stress of losing the family business, causing her immediate family to unravel.

To read more about the Stroh’s struggle with intergenerational wealth management see the New York Times article.

Learn more about Frances Stroh’s book here.

Blachly & Costantino Speaking at Women Living a Richer Life Summit

Join SYK’s Victoria Blachly and Chris Costantino on March 23rd for an empowering day of coaching, connections, and conversation at Brighton Jones Women Living a Richer Life Summit.

The duo have been selected to speak at the event. Blachly and Costantino will be among the 10 exceptionally amazing women chosen to take part in the summit.

The event will begin with Michelle Williams sharing her inspiration and vision for the Women Living a Richer Life Summit. Following the kick-off, be ready to engage in an interactive Q&A and to spend the day listening and learning. Attendees are encouraged to stay after, to celebrate the day together and share a toast at the cocktail hour. It’s a great opportunity to talk with speakers, and learn more about one another.

  • Registration opens at 8 a.m.
  • Complimentary parking is provided at the Multnomah Athletic Club
  • Breakfast buffet and lunch are provided.

Click the photo below for more information and register for this exciting event.

WLRL 2017 COIInvite