New Maryland Law Imposes Liability on General Contractor for Subcontractor's Failure to Pay Wages


Maryland general contractors be alert!  Effective October 1, 2018, Maryland law imposes new liability on general contractors for unpaid wages on a project.  The General Contractor Liability for Unpaid Wages Act (the “Act”) is modeled on a recent District of Columbia law.  The law is designed to ensure that subcontractors comply with state wage laws and pay their employees in a timely manner. If the subcontractor fails to pay as required, the general contractor will now be jointly and severally liable for such failure in accordance with Maryland wage & hour laws, which can include punitive (treble) damages and attorney’s fees. The Act also applies to sub-subcontractors on down, which means a general contractor can be liable for wage violations at any tier of a project.

General Contractor Should Include Indemnification Clause in Subcontract

The Act requires the subcontractor to indemnify the general contractor for "any wages, damages, interest, penalties, or attorney's fees owed as a result of the subcontractor's violation," unless indemnification is provided for in a contract between the general contractor and the subcontractor, or if the subcontractor was unable to pay its employees because the general contractor failed to pay the subcontractor as required. An indemnification clause should be written into the subcontract for added security, although this will only be beneficial if the subcontractor is solvent and has the ability to reimburse the general contractor.  If the subcontractor goes out of business or declares bankruptcy, the general contractor is fully on the hook for damages.  

General Contractor Should be Selective with Subcontractors

In light of this new risk, the general contractor should be selective in awarding projects to subcontractors.  The general contractor would be wise to avoid contracting with unknown companies unless a bond or other security is posted by the subcontractor.  Additionally, the subcontract should require the subcontractor to produce on demand its certified payroll records to prove compliance with wage laws.

Michael Campbell
is a partner in the litigation group at Miller, Miller & Canby. He focuses his practice on commercial, real estate and construction litigation.  Please feel free to contact Mr. Campbell at 301.762.5212 or send him an email for an inquiry.  For more information about the firm’s litigation practice, click here. For more information about the firm’s business and contract law practice, click here.





E-commerce Businesses Beware: Supreme Court Ruling May Expose You to Sales Tax on Interstate Sales


Earlier this summer, in Justice Anthony Kennedy’s final opinion before announcing his retirement, the Supreme Court threw 50 years of precedent into the wind with a decision that underscores the rise of e-commerce in our daily activities.  

 

“I wish there was a way to know you’re in the good old days before you’ve actually left them.”
              -Andy Bernard, The Office

For online businesses that are not currently collecting sales tax on interstate sales, the above quote took on special meaning this summer.  Those businesses, whether they know it or not, are in the good old days right now as a recent Supreme Court ruling is likely to leave them exposed to new sales tax obligations as well as burdensome and cumbersome compliance requirements.

New Supreme Court Ruling on Sales Tax

The Supreme Court’s ruling is a response to a twenty-first century problem.  In short, the evolution of the Internet brought with it a new marketplace – a virtual one, where buyers can do everything from grocery shopping to annual birthday and holiday shopping, all from the comfort of their living room sofas.  Indeed, consumers are prone to laziness and, when given the choice, have generally opted against getting dressed and leaving their house to go to the store.  As such, the convenience of the online shopping experience, combined with the sales tax savings, has given shoppers the incentive (or justification) to change their purchasing habits.

However, the rules are changing and the playing field is leveling, albeit slightly.

In South Dakota v. Wayfair, 585 U.S. ___ (2018), the Court concluded that the long-standing rule for allowing states to compel out-of-state retailers to collect sales tax was not only “unsound and incorrect,” but antiquated by modern standards.  That long-standing rule?  Actual, physical presence in the taxing state.  In other words, a Maryland business that hasn’t stepped one foot in Virginia can ship sales across the Potomac and incur no obligation to collect sales tax from the Virginian that bought its products.  However, if that Maryland business shipped its sale to Ocean City, MD, the sales tax obligation kicks in.  An advantage?  Most likely the failing brick and mortar stores like Sears, Toys R Us, and Circuit City would say so.

However, the physical presence rule was fraught with issues almost from the beginning.  Indeed, limiting physical presence had generally been manageable, but with the dawn of the Internet and the rise of e-commerce, restricting physical presence has become easier and more prevalent.  In turn, states began losing tax revenue to the current tune of between “$8 billion and $33 billion every year,” according to the Court.  In response, states began enacting laws in an attempt to recapture as much of that money as possible.  In doing so, the states started stretching the definition of physical presence, or they began ignoring it altogether.  

In short, the Wayfair concluded that other connections or contacts with the taxing state are sufficient to meet with constitutional requirements. 

What Does this Mean for Your Online Businesses and Why You Need a Tax Attorney?

Now, not only is physical presence adequate, certain economic contacts or “virtual connections” are enough to expose an online business to a state’s sales tax regime.  

However, Wayfair leaves the issue unsettled.  Specifically, the Court failed to provide guidance for the type of contacts or connections, whether economic or virtual, or both, that will meet this new, constitutional standard.  But what happens in response to Wayfair is entirely predictable –legislatures will pass new laws, or expand old ones, to take advantage of this new revenue stream.  In doing so, they will push the boundaries to test the uncertainty created by Wayfair.  Accordingly, this issue will work its way back through the courts for further guidance on the type or amount of economic activity now required.

Presently, online businesses need to know how Wayfair impacts their business models and operations.  An experienced tax attorney can review the states and local jurisdictions where a business ships purchases or delivers services, or where it otherwise has any type of physical or economic presence or connection.  An in-depth analysis of the definitions for “sellers,” “vendors,” “dealers,” “retailers,” or the like, will help an online business understand its exposure to a particular sales tax regime.  If there is exposure, a review of that state or local jurisdiction’s sales tax code will be required to determine whether such exposure has ripened into an obligation.  Indeed, where a business has sales tax obligations, not only will collecting and remitting be required, but so will registration, reporting and filing; and most states have laws holding business owners or officers personally liable for failing to comply with its sales tax laws.  In addition, not only will businesses need to educate themselves with the legal and regulatory framework of multiple jurisdictions, but they will need to stay current with any new developments which may affect how and where they sell products or deliver services.  Accordingly, the good old days of sales tax being either a minor inconvenience or inconsequential are likely over for many unknowing and unsuspecting online businesses.  

Chris Young
is an associate in the Business & Tax practice at Miller, Miller & Canby. He focuses his practice on tax controversy work and helping clients deal with new tax regulations. He can be reached at 301-762-5212. View more information about Miller, Miller & Canby's Business & Tax practice by clicking here.
 





Miller, Miller & Canby Welcomes Attorney Christopher Young to Business & Tax Practice


Christopher Young has joined Miller, Miller & Canby as an Associate in the Business & Tax Practice Group, where he will focus his practice in tax law and business law.  Mr. Young works with business clients and individuals to resolve tax disputes with the Internal Revenue Service and state agencies. He works with corporate clients on issues related to corporate disputes, governance, formations and restructurings, as well as drafting and reviewing corporate documents such as contracts and purchase agreements, operating agreements and partnership agreements. He also advises clients on matters related to foreign financial account reporting and compliance.

Prior to joining Miller, Miller & Canby, Mr. Young worked for four years as an associate attorney at JDKatz, P.C., where he focused his practice in tax controversies and issues related to corporate disputes. He represented clients on business and tax law matters, and provided general corporate and tax counsel.

Mr. Young began his career as a State Tax Law Editor at Bloomberg BNA. While in law school, he worked as a law clerk with the U.S. Department of Justice, Tax Division, in the Financial Litigation Unit. There, he drafted legal documents and investigated and uncovered taxpayer assets to facilitate collection efforts. For his achievements, he was honored with a special commendation for his work on Fidelity International v. United States and Fidelity High Tech v. United States.

Mr. Young is admitted to practice law in Maryland and Virginia. He earned his Bachelor of Arts degree in History from Virginia Tech, and earned his Juris Doctorate from The Catholic University of America, Columbus School of Law.

Click the download button below to view the firm's formal press release. For more information about Miller, Miller & Canby’s Business & Tax Practice, click here or contact Chris at 301-762-5212.
 





New Maryland Legislation Caps Estate Tax Exemption at $5 Million Beginning January 1, 2019


A new law changes both the exemption allowed and rules permitting use of estate tax exemptions in the state of Maryland. For individuals dying in 2018, the Maryland estate tax exemption is $4 million - a $1 million increase from the 2017 Maryland estate tax exemption. This change was part of a 2014 law that incrementally increased the Maryland estate tax exemption each year until 2019, when the exemption was scheduled to match the federal applicable exclusion amount.

Federal Estate Tax Exclusion for 2019
As a result of the recently-enacted, sweeping federal tax reform known as the Tax Cuts and Jobs Act of 2017 (TCJA), the federal applicable estate tax exclusion amount is approximately $11.2 million for decedents dying in 2018. Under the federal law, the exclusion amount will adjust annually for inflation. It is estimated that the federal applicable estate tax exclusion amount will be approximately $11.4 million for decedents dying in 2019. Accordingly, under prior Maryland law, the Maryland estate tax exemption was scheduled to automatically jump from $4 million in 2018 to approximately $11.4 million starting January 1, 2019.

Maryland Estate Tax Exclusion for 2019
However, in early April 2018, new legislation was enacted in Maryland that will cap the amount exempt from Maryland estate tax at $5 million for people who die on or after January 1, 2019. This new law replaces the prior 2014 Maryland law that was scheduled to bring the Maryland estate tax exemption in line with the federal applicable exclusion amount in 2019. In addition, the new Maryland exemption amount will not adjust for inflation each year. So, the amount that a Maryland resident can transfer estate-tax free at death will remain frozen at $5 million until new legislation is passed in the future.

Portability Allowed in New Maryland Law
The new Maryland law also provides for “portability,” a rule permitting a surviving spouse to use, under certain circumstances, the portion of his or her deceased spouse’s unused Maryland estate tax exemption. While portability has been a permanent feature of the federal estate tax scheme for several years, this marks the first time that portability will be available in Maryland, making Maryland one of the few states that provide this relief to its citizens.

How the New Law Effects Estate Planning
Keep in mind that estate tax planning is only one aspect of a comprehensive estate plan. If your estate is not likely to be subject to federal estate tax or even Maryland estate tax under the new law, you should likely focus more on incapacity planning, asset and nursing home protection, guardianship of minor children, blended family issues, special needs children planning, business succession planning, and minimizing income taxes. Current estate plans may not have the intended consequences under the new rules, and no one should wait for a death to find out if they have a good estate plan.

David A. Lucas
is an Attorney in Miller, Miller & Canby’s Estates & Trusts and Business and Tax Practice Groups. David is committed to providing his clients with a well-crafted estate plan so they may avoid probate, protect their assets and legacies, and provide for the security of their loved ones. He takes a special interest in ensuring that the dreams parents have for their children and grandchildren are not lost to taxes, poor planning, or procrastination. He speaks frequently on a variety of estate planning topics to both the general public and private groups.

David has focused his practice on helping families preserve their financial wealth and legacies for future generations through the use of Trusts, Wills, Powers of Attorney, Advance Medical Directives, Living Wills, and other estate planning strategies.

Contact David
to discuss your estate plan to take advantage of the laws available today and ensure flexibility for future changes. For more information on Miller, Miller & Canby’s Estates & Trusts Practice, click here.





Maryland Property Tax News: Tax Court Determines Value of Casino Land in Case of First Impression


In a case of first impression, the Maryland Tax Court recently considered how to value property subject to a 99-year ground lease with a percentage rent arrangement.   The unusual property tax case involved a lease that was entered into by a casino operator and shopping mall owner, in which the casino was responsible for the property taxes.  Casinos are highly regulated entities in Maryland, with operators required to obtain approval from the Maryland Lottery and Gaming Control Commission and pay a large licensing fee.

 Under the ground lease, the casino was required to pay fixed minimum annual rent plus a variable 1% of annual  gross revenues (known as “percentage rent”) generated from gaming and retail sales.  The issue before the court was whether the ground lease should be used as the measure to assess fair market value of the land for ad valorem tax purposes.  The State argued that the lease must be relied upon under an income approach to value.  The casino argued that the ground lease could not be relied upon at all due to its connection to casino revenues.  Instead, the casino urged the court to utilize the sales comparable approach as the only reliable measure of land value.

In analyzing the issue, the Tax Court reviewed Maryland and Federal law related to valuing property subject to leases.  The general rule is that an assessor must consider the effect of a lease on valuation, but it should not be the controlling document in assessing value.  In this case, it was especially true because the ground lease was not a good indicator of property value for these reasons:

  1. The percentage rent provision in the ground lease was speculative and the revenue unknown at the time of execution; and

  2. Including percentage rent in an income approach risks valuing property based on business value instead of property value. Here, approximately two-thirds of the ground rent was derived from the casino business as percentage rent. 

The Maryland Tax Court held that such business income was not indicative of property value, particularly since the property cannot be freely sold in its current use due to the special licensing arrangement with the State.   

In rejecting the States reliance on an income approach using the ground lease, the Tax Court turned to the casino’s appraisal using a sales comparison approach.  The appraisal report listed sales of other properties on which casinos were ultimately constructed – Horseshoe Casino in Baltimore City and the MGM National Harbor Casino on Prince George’s County.   The court deemed that sales are the best indicator of land value for the subject property and reduced the land assessment by a whopping $71M for the 2011 tax cycle and $70M for the 2013 tax cycle, which resulted in a massive tax savings for the casino.  The case is PPE Casino Resorts Maryland LLC vs. Supervisor of Assessments of Anne Arundel County, Case Nos. 14-RP-AA-0503 (1-2) and 14-RP-AA-1276.

Miller, Miller & Canby has been handling assessment appeals of various types of commercial properties in Maryland for more than 30 years.  In 2016, we obtained over $20,000,000 in property assessment reductions for our clients.  Our litigation attorneys regularly represent clients at the assessor level, before the Property Tax Assessment Appeals Board (PTAAB) and in the Maryland Tax Court.  We have successfully appealed the assessments on office buildings, hotels, casinos, retail stores, industrial sites, warehouses, apartment buildings and land at various stages of development.  

Michael Campbell is a partner in the litigation group at Miller, Miller & Canby. In addition to trial and appellate advocacy, his practice focuses on real estate litigation and property tax assessment appeals.  Please feel free to contact Mr. Campbell at 301.762.5212 or send him an email for property tax guidance.  For more information about the firm’s Maryland property tax appeals practice and representative cases, click here.





How Does Tax Reform Affect Your Estate Plan?


In December 2017, a sweeping tax reform bill, commonly known as the Tax Cuts and Jobs Act of 2017 (TCJA), was passed by Congress and signed into law by the President. The TCJA reduces individual and corporate tax rates, eliminates a host of deductions, enhances other breaks, and makes numerous other changes. But how does the TCJA affect your estate plan?  

One thing the TCJA did not do is repeal the federal gift and estate tax, as initially planned by the House of Representative’s version of the bill. Instead, the TCJA temporarily doubles the combined gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption from $5 million to $10 million (adjusted for inflation after 2011). For 2018, the exemption is now $11.2 million per person ($22.4 million for a married couple). This doubled exemption will adjust for inflation each year and will remain in effect until December 31, 2025. If Congress doesn’t act before 2026, the law will sunset and the exemptions will revert to the $5 million level (indexed for inflation).


New Estate Planning Opportunities

These changes open considerable opportunities for people to remove assets from their taxable estates and permanently exempt future appreciation of those assets from estate, gift, and GST tax. For example, by using the increased exemption amount to make tax-free lifetime gifts, you can protect that wealth (and any future appreciation in value) from taxation in your estate, even if smaller exemptions are reinstated before death. Be aware though, that unlike assets transferred at death, lifetime gifts will not receive a stepped-up tax basis. This could cause an increase in income taxes on any gain realized by the recipient when they sell the gifted asset. It is therefore critical to weigh the potential estate tax savings against the potential income tax costs when considering this strategy.


Lifetime Gifting Strategy with 529 College Savings Plan

If you can benefit from a lifetime gifting strategy, then you may want to consider combining that strategy with a 529 college savings plan. The TCJA permanently expands the benefits of these plans, which now permit tax-free withdrawals for qualified elementary and secondary school expenses and not just higher-education expenses. Contributions to 529 plans are removed from your taxable estate even though you can change the beneficiaries at any time and even get your money back (Note: a penalty will be assessed for any non-qualified distributions).  And, you can combine 5 years’ worth of annual gift tax exclusions (currently $15,000 per year) into one year, so an individual could gift $75,000 to a 529 plan this year (or $150,000 for married couples) without triggering gift or GST tax or using any of your exemptions.


Dynasty Trust

It may also be an ideal time to establish a “Dynasty trust.” Significant amounts of wealth can grow and compound free of federal estate, gift, and GST tax with this type of irrevocable trust, providing tax-free benefits for your grandchildren and future generations. In Maryland and a few other states, a dynasty trust can last forever, but some states restrict the length of time these trusts can exist. Avoiding the GST tax is imperative as it imposes an additional 40% tax on transfers to grandchildren and others that skip a generation. Clearly, this tax will quickly erode large amounts of wealth. The key to avoiding the GST tax is to leverage your new, doubled GST tax exemption.

For example, let’s assume that you have not yet used any of your estate and gift tax exemptions and you transfer $10 million to a properly-crafted dynasty trust. There would be no gift tax because you are within your exemption amount. Now, the funds in the dynasty trust, and all future appreciation of those funds, are out of your taxable estate. Then, by allocating your GST tax exemption to your $10 million trust contribution, you can ensure that any distributions from the dynasty trust to your grandchildren (or subsequent generations) avoid GST tax. This is true even if the trust’s funds grow well beyond the exemption amount and even if the exemption amount is reduced in the future.


Other Estate Planning Considerations

Keep this in mind though: estate, gift, and GST tax planning is only one aspect of estate planning. Given that some pundits are predicting that the TCJA has reduced the number of U.S. estates subject to estate tax from approximately 5,000 to 2,000, most families should likely focus more on non-estate tax issues, like incapacity planning, asset and nursing home protection, guardianship of minor children, blended family issues, special needs children planning, business succession planning, and minimizing income taxes.

In fact, it may be preferable to engage in strategies to reduce income tax now and then transfer those savings to your beneficiaries at death with as little transfer tax as possible. This can be done in a variety of ways, including, but not limited to:

  •  Shifting income to someone else: make a lifetime gift of an asset that produces a lot of income to a trust that distributes the taxable income to a beneficiary that is in a lower tax bracket;

  • Charitable giving: contribute more to charity. The TCJA increases the adjusted gross income limitation for deductions of cash donations to public charities from 50% to 60%; and

  • Delaying capital gains taxation: make a gift of an asset that has already appreciated and that you want to sell to a charitable remainder trust (CRT). A sale by the CRT avoids immediate capital gains taxation. 100% of the proceeds of the sale are then reinvested. Distributions from the CRT each year will be taxed to the beneficiary, but may avoid income taxation at top rates.

The TCJA is perhaps the most significant tax legislation in over 30 years. Continued review and experience with the Act will unquestionably reveal numerous new planning opportunities in the coming months and years. Don’t fall into the trap that you don’t need a well-crafted estate plan because of the increased federal estate, gift, and GST tax exemption. Current estate plans may not have the intended consequences under the new rules, and no one should wait for a death to find out if they have a good estate plan.

David A. Lucas is an Attorney in Miller, Miller & Canby’s Estates & Trusts and Business and Tax Practice Groups. David is committed to providing his clients with a well-crafted estate plan so they may avoid probate, protect their assets and legacies, and provide for the security of their loved ones. He takes a special interest in ensuring that the dreams parents have for their children and grandchildren are not lost to taxes, poor planning, or procrastination. He speaks frequently on a variety of estate planning topics to both the general public and private groups.

David has focused his practice on helping families preserve their financial wealth and legacies for future generations through the use of Trusts, Wills, Powers of Attorney, Advance Medical Directives, Living Wills, and other estate planning strategies.

Contact David
to discuss your estate plan to take advantage of the laws available today and ensure flexibility for future changes. For more information on Miller, Miller & Canby’s Estates & Trusts Practice, click here.





MM&C Welcomes New Estate Planning Attorney David Lucas


Miller, Miller & Canby is pleased to welcome David A. Lucas to the Estates & Trusts and Business & Tax Practices, where he will focus his practice on Estate Planning, Trust and Administration, Elder Law and Business Law.

“Miller, Miller & Canby’s Estates & Trusts and Business & Tax, Elder Law and Business Law practices have served families and businesses throughout Maryland and Washington, DC for decades,” said Robert E. Gough, Managing Shareholder for the firm. “We are very pleased to welcome David. His extensive private practice experience in estate and legacy planning, asset protection planning, retirement and business planning services will strengthen and expand our capabilities in these important disciplines.”

Mr. Lucas
is committed to providing his clients with a well-crafted estate plan so they may avoid probate, protect their assets and legacies, and provide for the security of their loved ones. He takes a special interest in ensuring that the dreams parents have for their children and grandchildren are not lost to taxes, poor planning, or procrastination. He speaks frequently on a variety of estate planning topics to both the general public and private groups.

Prior to joining Miller, Miller & Canby, Mr. Lucas was in private practice for 14 years. He began his legal career by serving as a Law Clerk to The Honorable Dennis M. McHugh of the Montgomery County Circuit Court in Rockville, Maryland. After his clerkship, he worked for a general practice firm, where he gained practical experience in a variety of disciplines, including civil litigation, employment law, workers’ compensation, administrative law, family law, estate planning, and business formation. Since 2006, Mr. Lucas has focused his practice on helping families preserve their financial wealth and legacies for future generations through the use of Trusts, Wills, Powers of Attorney, Advance Medical Directives, Living Wills, and other estate planning strategies.

Mr. Lucas is licensed to practice law in Maryland and the District of Columbia and is admitted to practice before the respective local and federal courts. He is a member of the Maryland State Bar Association, the District of Columbia Bar Association, and the Montgomery County Bar Association. He earned a B.A. in Sociology from The Catholic University of America in Washington, D.C. and earned his Juris Doctorate, cum laude, from The Catholic University of America’s Columbus School of Law.

Click the download button below to view the firm's formal press release. For more information about Miller, Miller & Canby’s Estates & Trusts and Business & Tax Practices, click here or contact David at 301-762-5212.
 





Property Owners Have 45 Days to Appeal New Maryland Property Tax Assessments


Last week, the Maryland Department of Assessments and Taxation (SDAT) issued new Assessment Notices to owners of one-third of all commercial and residential properties in Maryland.  For instance, in Montgomery County, commercial properties in Rockville and Gaithersburg were reassessed.  In Frederick County, commercial properties in Ijamsville, Emmitsburg, Thurmont and portions of Frederick were reassessed.  In Prince George’s County, commercial properties in Bladensburg, District Heights, Landover, Lanham and Suitland were reassessed.

Property owners have 45 days from the date of the Assessment Notice to challenge these new assessments.  The “first-level” appeal takes place at the local Assessment Office.  If the assessor refuses to reduce the assessment, the owner may file a further appeal to the county Property Tax Assessment Appeals Board (PTAAB).   This Board will consider the evidence and issue a written decision, usually within two weeks.  If the property owner is still dissatisfied, another appeal may be filed to the Maryland Tax Court.

Miller, Miller & Canby has been challenging the assessments of various types of properties in Maryland for more than 30 years and has obtained substantial reductions in real property assessments for our clients.  Our litigation attorneys regularly represent clients before the local Assessment Office, PTAAB and the Maryland Tax Court.  We have successfully appealed the assessments on office buildings, retail stores, senior living centers, warehouses, industrial sites, casinos, apartment buildings and cemeteries.  Let us help you reduce your Maryland property assessments in 2017.  

Michael Campbell
is a partner in the litigation group at Miller, Miller & Canby.  In addition to trial and appellate advocacy, his practice focuses on real estate litigation and property tax assessment appeals.  Please feel free to contact Mr. Campbell at 301.762.5212 or send him an email for property tax guidance or to help reduce your commercial Maryland property tax assessment.  For more information about the firm’s Maryland property tax appeals practice and representative cases, click here.
 





Starting a New Business? Having a Trusted Team of Legal and Financial Advisors is a Key to Success


Starting a new business is a very exciting time for entrepreneurs with future success in mind. Having a start-up team of trusted financial and legal advisers that includes bankers, lawyers and accountants who listen to your goals and provide cohesive advice is one of the key ingredients to future business success.

Why Hire A Business Law Attorney?
In today’s high-tech world, there are several online resources available to get your business started that may seem cost effective. Keep in mind the old saying, “You get what you pay for”. There is seldom a one size fits all strategy for structuring a business. The key is to find a business and tax attorney who can discuss the issues that the new business owner should consider, explain options, and map out the best strategy for the business owner based on his or her particular needs. Many may want to choose one form of entity over another because they know someone else who chose that form. However, just because an S Corp was the right entity for your father (as he had taken Social Security at 62 and didn’t want the income from the side business to reduce his Social Security benefits), or a friend of a friend set up a C Corp (to maximize certain retirement plan benefits for his long-term financial plan), or a co-worker who set up an LLC (as one of the owners was not a US Person), that doesn’t mean that is the right choice for you and your new business.

The Small Business Administration has outlined “10 Steps to Start Your Business” on their website. Below is a summary of the 10 point plan from the SBA and the steps where a business lawyer should be engaged.

Step 1: Conduct Market Research
Is there an opportunity to turn your idea into a success? Do your research to find a competitive advantage.

Step 2: Write a Business Plan
A well written business plan is your roadmap to success. A business attorney should be consulted during this step to help write the plan to show investors and key stakeholders that you have addressed all legal aspects to make your business a success.

Step 3: Fund the Business
How much money do you need to start the business? If you don’t have the funds, do you borrow or raise the capital needed? A financial advisor should be involved in this step.

Step 4: Pick a Location
Whether your new business is in a physical location or an online store, there is an effect on taxes, legal requirements and revenue.  You should obtain advice from your attorney and accountant in this step.

Step 5: Choose Your Business Structure
Choice of entity for your business impacts personal liability, taxes and most importantly business registration legal requirements. A business attorney with experience in the location of your business is critical during this stage.

Step 6: Choose a Business Name
Choosing the perfect name that reflects your brand may keep you up at night. A business attorney should be engaged to ensure you have rights to the name you select.

Step 7: Register the Business
A business lawyer is critical in this step to make your business legal and protect your brand. You need an attorney who directs your business registration with federal, state and local governments.

Step 8: Obtain Federal and State Tax IDs
Your Employer Identification Number (EIN) needs to be obtained to start and grow your business. Some states require a state tax ID as well.  A business and tax attorney can help you obtain all ID’s that are legally required for your business.

Step 9: Apply for Licenses and Permits
A business attorney will help you keep your business running smoothly by staying legally compliant. Licenses and permits vary by industry, state, location and other factors. Engaging a knowledgeable business lawyer during this step is important.

Step 10: Open a Business Bank Account
Once you have all the business registrations and paperwork completed, it is time to open a small business checking account.

Miller, Miller & Canby’s business law attorneys have over 70 years of experience assisting small businesses as well as large corporations in all aspects of business law and corporate planning, including choice of entity, entity formation and dissolution of taxable and tax-exempt entities, corporate reorganizations, mergers, acquisitions, and business succession. As both CPAs and practicing attorneys, MM&C attorneys are an incredible resource as legal, tax and financial advisors to our clients.

Please feel free to contact any of the business & tax attorneys at Miller, Miller & Canby at 301-762-5212 with your business start-up or legal needs.  View more information about Miller, Miller & Canby's Business & Tax practice by clicking here.  
 





Maryland Real Property Tax Exemptions


Maryland’s tax laws contain a variety of tax exemptions for different types of real property uses.  It’s important to note that just because a property owner is a church, charity or non-profit organization, such status does not automatically qualify the real estate for a property tax exemption.  Additionally, a tax exemption is not the same as a tax credit, which is available to certain property owners under a different section of the Maryland Code.  

View the article by MM&C Litigation Attorney, Michael Campbell, which discusses some of the more common tax exemptions available and the process for obtaining an exemption by clicking the download attachment link below.

Miller, Miller & Canby has been handling assessment appeals of various types of commercial properties in Maryland for more than 30 years.  In 2016, we obtained over $20,000,000 in property assessment reductions for our clients.  Our litigation attorneys regularly represent clients at the assessor level, before the Property Tax Assessment Appeals Board (PTAAB) and in the Maryland Tax Court.  We have successfully appealed the assessments on office buildings, hotels, casinos, retail stores, industrial sites, warehouses, apartment buildings and land at various stages of development.  

Michael Campbell is a partner in the litigation group at Miller, Miller & Canby. In addition to trial and appellate advocacy, his practice focuses on real estate litigation and property tax assessment appeals.  Please feel free to contact Mr. Campbell at 301.762.5212 or send him an email for property tax guidance.  For more information about the firm’s Maryland property tax appeals practice and representative cases, click here.
 





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