On Friday, March 22, the United States Senate approved a non-binding amendment to the Senate budget resolution, by a vote of 75-24. The non-binding amendment expresses support for the adoption of a federal bill authorizing states to impose use tax collection obligations upon out-of-state retailers without regard to whether the retailers have a physical presence in the state. The Senate did not vote on an actual bill specifying the terms on Congressional authorization for expanded state use tax collection authority.
E-commerce vendors and other remote sellers interested in the legislation should contact their representatives in Congress to ensure that any federal bill considered for adoption guarantees meaningful uniformity and simplification of existing state sales and use tax systems. The bill currently before Congress, the so-called Marketplace Fairness Act, fails to include fundamental simplification measures, such as requiring one tax rate per state and uniform tax bases and exemptions, providing for vendor compensation, implementing consistent and coherent sourcing rules for products and services, and harmonizing state sales tax holidays. Readers can find out more about true sales and use tax simplification here.
We will continue to follow developments on federal legislation.
Monday, March 25, 2013
Tuesday, March 19, 2013
The Perils of Zip Code Collection Reach Massachusetts
On March 11, 2013, the Supreme Court of Massachusetts joined California in prohibiting the collection and retention of customer zip codes by retailers in connection with credit card transactions. In Tyler v. Michaels Stores, Inc., the Court based its decision on Massachusetts General Law ch. 93, § 105(a), which provides that retailers cannot “write, cause to be written, or require that a credit card holder write personal identification information not required by the credit card issuer, on the credit card transaction form.” Like California, the Massachusetts court interpreted "personal identification information" so broadly as to include mere zip codes.
Background. In 2011, the Supreme Court of California sent shock waves through the retail industry when it ruled in Pineda v. Williams Sonoma Stores, Inc. that zip codes constituted “personal identification information” under California Civil Code § 1747.08 that could not be collected and retained in connection with credit card transactions except in very limited instances. The prohibition against collection of personal identification information applied even if zip codes were requested, but not required, to complete a purchase. As a result of the decision, retailers selling to California consumers have faced costly class action lawsuits (with claims for as much as $1,000 per violation) even if no actual damages or injury could be shown. And while the Supreme Court of California recently held in Apple, Inc. v. Superior Court, that this prohibition did not apply to online transactions involving digitally downloaded products, the Court was careful to state that it was reserving judgment as to whether it applied to “any other transactions that do not involve in-person, face-to-face interaction between the customer and retailer”—explaining that “we express no view on whether the statute governs mail order or telephone order transactions...”
It should be noted that the California prohibition does not apply where address information (including zip codes) is required for “a special purpose incidental but related to the individual credit card transaction, including, but not limited to, information relating to shipping, delivery, servicing, or installation of the purchased merchandise, or for special orders.” Cal. Civ. § 1747.08(c)(4). Thus, in most instances, direct marketers may be outside the scope of California’s prohibition when the address information is required, for example, for shipping. This exclusion, however, may not apply in gift transactions where a product is shipped to a third-party, or where the customer makes arrangements to pick up a product at an in-state location other than his or her home address. Like California’s law, the statute in Massachusetts defines “personal identification information” broadly, and includes a narrower exception where the information is “necessary for shipping, delivery or installation of purchased merchandise or services or for a warranty when such information is provided voluntarily by a credit card holder.”
The Massachusetts Case. In reaching its holding, the Supreme Court of Massachusetts concluded that zip codes were “personal identification information” because, when combined with a consumer’s name, they provide “the merchant with enough information to identify through publicly available databases the consumer’s address or telephone number…” And while the Court found that a consumer had to show injury in order to sue based upon a violation of § 105(a), such an injury was not limited to a “loss of money or property.” The court ruled that “actual receipt by a consumer of unwanted marketing materials” constituted an actionable injury, as did “the merchant’s sale of a customer’s personal identification information to a third party.” While the court was not presented with the question of whether the law applied to online or mail order transactions, its expansive interpretation could well reach direct marketers who fall outside § 105(a)’s limited safe harbor. One question the Massachusetts court did not address: whether the law prohibits the entry of a zip code (or other personal information) into a company database, as opposed to its entry on an electronic credit card transaction form. That nuance may provide a ray of hope for retailers caught up in the class action frenzy this decision is likely to trigger.
Nationwide Risks. Retailers face risks in other jurisdictions that have statutes similar to those in California and Massachusetts, including Delaware, the District of Columbia, Maryland, Minnesota, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, and Wisconsin. It would be wise to carefully review your information collection rules in these and other states as a first line of defense against class action lawsuits and state enforcement actions. In combination, the California and Massachusetts decisions are so wide-sweeping as to provide tremendous encouragement to class action lawyers eager to test the reach of laws in other states.
Background. In 2011, the Supreme Court of California sent shock waves through the retail industry when it ruled in Pineda v. Williams Sonoma Stores, Inc. that zip codes constituted “personal identification information” under California Civil Code § 1747.08 that could not be collected and retained in connection with credit card transactions except in very limited instances. The prohibition against collection of personal identification information applied even if zip codes were requested, but not required, to complete a purchase. As a result of the decision, retailers selling to California consumers have faced costly class action lawsuits (with claims for as much as $1,000 per violation) even if no actual damages or injury could be shown. And while the Supreme Court of California recently held in Apple, Inc. v. Superior Court, that this prohibition did not apply to online transactions involving digitally downloaded products, the Court was careful to state that it was reserving judgment as to whether it applied to “any other transactions that do not involve in-person, face-to-face interaction between the customer and retailer”—explaining that “we express no view on whether the statute governs mail order or telephone order transactions...”
It should be noted that the California prohibition does not apply where address information (including zip codes) is required for “a special purpose incidental but related to the individual credit card transaction, including, but not limited to, information relating to shipping, delivery, servicing, or installation of the purchased merchandise, or for special orders.” Cal. Civ. § 1747.08(c)(4). Thus, in most instances, direct marketers may be outside the scope of California’s prohibition when the address information is required, for example, for shipping. This exclusion, however, may not apply in gift transactions where a product is shipped to a third-party, or where the customer makes arrangements to pick up a product at an in-state location other than his or her home address. Like California’s law, the statute in Massachusetts defines “personal identification information” broadly, and includes a narrower exception where the information is “necessary for shipping, delivery or installation of purchased merchandise or services or for a warranty when such information is provided voluntarily by a credit card holder.”
The Massachusetts Case. In reaching its holding, the Supreme Court of Massachusetts concluded that zip codes were “personal identification information” because, when combined with a consumer’s name, they provide “the merchant with enough information to identify through publicly available databases the consumer’s address or telephone number…” And while the Court found that a consumer had to show injury in order to sue based upon a violation of § 105(a), such an injury was not limited to a “loss of money or property.” The court ruled that “actual receipt by a consumer of unwanted marketing materials” constituted an actionable injury, as did “the merchant’s sale of a customer’s personal identification information to a third party.” While the court was not presented with the question of whether the law applied to online or mail order transactions, its expansive interpretation could well reach direct marketers who fall outside § 105(a)’s limited safe harbor. One question the Massachusetts court did not address: whether the law prohibits the entry of a zip code (or other personal information) into a company database, as opposed to its entry on an electronic credit card transaction form. That nuance may provide a ray of hope for retailers caught up in the class action frenzy this decision is likely to trigger.
Nationwide Risks. Retailers face risks in other jurisdictions that have statutes similar to those in California and Massachusetts, including Delaware, the District of Columbia, Maryland, Minnesota, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, and Wisconsin. It would be wise to carefully review your information collection rules in these and other states as a first line of defense against class action lawsuits and state enforcement actions. In combination, the California and Massachusetts decisions are so wide-sweeping as to provide tremendous encouragement to class action lawyers eager to test the reach of laws in other states.
Friday, March 15, 2013
April 1: BC to Revert to the PST While PEI Implements HST
We post here occasionally about developments in the Canadian tax system to keep our readers aware of important changes and new requirements.
For instance, back in 2011, we wrote that voters in British Columbia had decided to discontinue the Harmonized Sales Tax (HST) and return to the provincial sales tax, or PST. As part of this deharmonization, BC taxpayers had to repay the $1.6 billion of transitional funding received from the federal government. BC officials also had to re-implement the PST. Officials have completed their work and BC will revert back to the PST on April 1. (Taxpayers, of course, will still owe 5% GST on certain goods and services after April 1, as well.) Current PST laws and regulations are all now available on BC’s PST website here. Retailers are also required to register for the PST and can do so online here. Note that even if a business was registered under the prior PST, that business must now re-register.
In other news, Prince Edward Island will join New Brunswick, Newfoundland and Labrador, Nova Scotia, and Ontario, when it implements the HST on April 1. PEI will have a HST rate of 14%, of which 5% represents the federal component and 9% represents the provincial component. This represents a reduction in the total tax rate applicable in PEI, which was formerly 15.5%. PEI has produced a helpful checklist of tasks retailers should complete before April 1. For instance, retailers should determine whether they must self-assess the provincial part of the HST for supplies purchased after February 1, 2013, and should determine whether any tax is due on the provincial part of the HST for any payments due or paid to them after November 8, 2012. Retailers should be sure to file their final PST returns by April 20, 2013, as well.
Vendors should take a close look at their current tax practices and make sure their systems are updated to reflect both the return to the PST in BC and the implementation of the HST in PEI. And if that’s alphabet soup to you, our readers, you might consider contacting your tax professionals to make sure any sales you make into these or any other Canadian provinces comply with local taxes in effect!
For instance, back in 2011, we wrote that voters in British Columbia had decided to discontinue the Harmonized Sales Tax (HST) and return to the provincial sales tax, or PST. As part of this deharmonization, BC taxpayers had to repay the $1.6 billion of transitional funding received from the federal government. BC officials also had to re-implement the PST. Officials have completed their work and BC will revert back to the PST on April 1. (Taxpayers, of course, will still owe 5% GST on certain goods and services after April 1, as well.) Current PST laws and regulations are all now available on BC’s PST website here. Retailers are also required to register for the PST and can do so online here. Note that even if a business was registered under the prior PST, that business must now re-register.
In other news, Prince Edward Island will join New Brunswick, Newfoundland and Labrador, Nova Scotia, and Ontario, when it implements the HST on April 1. PEI will have a HST rate of 14%, of which 5% represents the federal component and 9% represents the provincial component. This represents a reduction in the total tax rate applicable in PEI, which was formerly 15.5%. PEI has produced a helpful checklist of tasks retailers should complete before April 1. For instance, retailers should determine whether they must self-assess the provincial part of the HST for supplies purchased after February 1, 2013, and should determine whether any tax is due on the provincial part of the HST for any payments due or paid to them after November 8, 2012. Retailers should be sure to file their final PST returns by April 20, 2013, as well.
Vendors should take a close look at their current tax practices and make sure their systems are updated to reflect both the return to the PST in BC and the implementation of the HST in PEI. And if that’s alphabet soup to you, our readers, you might consider contacting your tax professionals to make sure any sales you make into these or any other Canadian provinces comply with local taxes in effect!
Time to Wake up and Smell the Roses Townsville Real Estate; Queen Bees are Being Born
Mr McLeod of Rapid Realty Australia and Director of McINC Investments and Consultancy said, “Consumer confidence indices have been improving over many months which suggests that lower prices and retail discounting is stirring the end consumer to feel they have more bang for buck. “This sentiment has been evolving in the non-discretionary spending sector such as accommodation and housing for many months”, Mr McLeod said.
“Leaders in our North Queensland headquarters in Townsville have reported that prospective tenants and buyers for that matter are asking to negotiate prices down more frequently and with more depth suggesting consumers have a higher expectation that prices could be discounted”, Mr McLeod said.
This is also reflected in the Melbourne Institute’s Consumer Sentiment Index which reports that sentiment has increased by 2.0% over the month to 110.5 points which is its highest level since December 2010 (111.0 points). The consumer sentiment index has increased over six of the past seven months and is up by 12.6% over the past six months.
Each component of the index except for time to buy a major household item rose over the month and only the index which measures family finances over the past 12 months is showing higher levels of pessimism than optimism. RP Data Property Pulse, 15/03/2013.
For the first time in nearly a decade, the Townsville rental vacancy rate has bounced over 3% to 3.14% in February 2013, HTW Rental Vacancy Survey, Feb 2013.
For many in the industry this is unprecedented and could typically put downward pressure on rental accommodation prices if sustained. However, Mr McLeod believes this anomaly will be short lived and should improve for investors as North Queensland, and Townsville particularly, traditionally has a seasonal movement of consumers out of accommodation in November and December and January. Accommodation is now being filled with new arrivals and streetscape changes occurring.
By contrast, the Australian Bureau of Statistics (ABS) released the January 2012 housing finance data this week. The data revealed that the number of owner occupier finance commitments fell by -1.5% over the month with non-refinance commitments falling by -1.9% and refinance commitments -0.7% lower. Year-on-year, non-refinance commitments are -0.8% lower than last January while refinance commitments have recorded a much greater -10.0% fall.
The total value of housing finance commitments rose by 2.4% over the month with investment finance commitments increasing by 4.4% and owner occupier commitments increasing by 1.3%. Year-on-year, the total value of owner occupier finance commitments has fallen by -0.5% however, investment commitments have seen a significant increase of 18.6% as reported by the ABS. The increase in investor finance compared to domestic finance is a significant measure of consumer-centric investors’ finding confidence in a more favorable property market, improving global economic data from the United States, Asia and Europe on our domestic equities markets expanding.
The Melbourne Institute Consumer Sentiment Survey identified 21.3% of respondents felt that real estate was the wisest place, down from 24.0% last quarter to invest over bank deposits, shares, paying down debt, etc. The proportion of loans to first home buyers was at its lowest ever level in Queensland (10.4%) over the month.
“The gestation period for consumer-centric investors as confident buyers has been long coming over the past four years since the housing market peeked, and with a cultural effect from consumers becoming comfortable with retail price discounting, now is the time to “wake up and smell the roses” before the Self-Managed Superannuation Fund and experienced and astute investors pick the early blossom in the Townsville real estate market”, Mr McLeod said.
So when could be the best time to pick the right property?
At a micro level it is impossible to pick the perfect day. The lead indicators are in place to act within the next 6-12 months because the number of competitive buyers with consumer-centric needs (owner-occupiers) should be in less demand. Although not the only lead indicator of owner-occupier buying behaviors, the higher rental vacancies rate over 3% in December 2012 suggests a historical correlation of lower domestic demand by owner-occupier’s could be occurring in the next 6-12 months.
We did see a contrasting behavior by owner-occupiers later in 2012 as Townsville welcomed the 3rd Army Battalion approximately 6-12 months before as rental consumers. Demand indicators showed lower rental vacancy rate at around 2% during March and April 2012.
A sustained improvement in investor and business confidence could play out in the Townsville economy after the Federal election is held in September 2013, by which time State Government infrastructure spending, institutional, SMSF, private equity and development investor’s may also ramp up the flow of capital on the back of lower domestic interest rates and a global financial recovery.
In the meantime, a residual demand of owner-occupiers seeking to upgrade, downgrade and street change, and those economically resilient consumers with residual wealth and a growing institutional investor market should see property prices be maintained over coming months in the Townsville residential market.
Data Source:
Rapid Realty Townsville Vacant Rates Data, Feb 2013. www.rapidrealty.com.au
Australian Bureau of StatisticsWestpac and Melbourne institute Consumer Sentiment Survey
RP Date Property Pulse, February 2013
Herron Todd White Townsville Rental Vacancy Rate Survey, Feb 2013
Tuesday, March 5, 2013
Plateau Duplex, Ready for Its 2nd Act. $387,000
UPDATE We sold this duplex in less than a week for four per cent over the asking price. (You do the math.) Our vendor is delighted.
Amy Barratt and I are about to list a duplex on Hotel de Ville Ave. just south of St. Josph Blvd. The property consists of a two-bedroom apartment that occupies the ground floor and second floor of the building. The third storey is a one-bedroom apartment.
The entire building will be available to the buyer.
The asking price is $387,000, which corresponds to the building's municipal evaluation. At that price, you understand that this is a building that requires some renovation, including a new roof, wiring, plumbing and probably interior finishes.
The current owner has had it for 15 years and has happily inhabited the third floor while renting out the larger apartment to tenants.
This building occupies more than 90 per cent of its lot. There is no yard of any kind.
This would be a kick-ass project for someone wanting to create a three-storey townhouse with a roof terrasse. It could also be reconverted into three-smaller apartments. If you've got the skills and the time or the money and the vision, there's no limit to what you might be able to do.
Give me a call at (514) 978-6522 to find out more or to book a visit.
The property will be listed on the MLS just as soon as I can data enter all the information. Probably tomorrow or Thursday, March 7, latest.
Amy Barratt and I are about to list a duplex on Hotel de Ville Ave. just south of St. Josph Blvd. The property consists of a two-bedroom apartment that occupies the ground floor and second floor of the building. The third storey is a one-bedroom apartment.
The entire building will be available to the buyer.
The asking price is $387,000, which corresponds to the building's municipal evaluation. At that price, you understand that this is a building that requires some renovation, including a new roof, wiring, plumbing and probably interior finishes.
The current owner has had it for 15 years and has happily inhabited the third floor while renting out the larger apartment to tenants.
This building occupies more than 90 per cent of its lot. There is no yard of any kind.
This would be a kick-ass project for someone wanting to create a three-storey townhouse with a roof terrasse. It could also be reconverted into three-smaller apartments. If you've got the skills and the time or the money and the vision, there's no limit to what you might be able to do.
Give me a call at (514) 978-6522 to find out more or to book a visit.
The property will be listed on the MLS just as soon as I can data enter all the information. Probably tomorrow or Thursday, March 7, latest.
 |
| Exterior view. The property is the left side of these twin buildings. |
 |
| View from the third-floor balcony. |
 |
| Street view. |
 |
| View of the corner of Hotel de Ville and St. Joseph. |
Monday, March 4, 2013
Banks behaving badly: Evictions of Military Families
- JSM
Sunday, March 3, 2013
Courts Continue to Examine Mixed Goods Cases
In mixed-sales transactions, those involving goods and services, most courts apply a predominant purpose test to determine if Article 2 of the UCC applies to the transaction applying sections 2-102 and 2-105. See, e.g., Warshaw v. QBE Ins. Corp., 78 U.C.C. Rep. Serv. 2d 434 (D. Mass. 2012)(providing that “where a contract implicates both goods and services, the test to determine the applicability of art[icle] 2 is whether ‘the predominant factor, thrust or purpose of the contract is . . . the rendition of service, with goods incidentally involved.’”). Under this test, Article 2 applies if the transaction is predominantly for the sale of goods, but does not apply if the transaction is predominantly for the provision of services. Courts continue to look at how this test works in individual cases.
For instance, in Audio Visual Artistry v.Tanzer, No. W2012–00216–COA–R3–CV, 2012 WL 6697600, at *1 (Tenn. Ct. App. Dec. 26, 2012), the court considered whether a contract for the installation of a “smart home system” during the construction of a new home was one for the sale of goods. Stephen Tanzer (“Tanzer”) and Audio Visual Artistry (“AVA) contracted for the sale and installation of electronic and entertainment equipment in Tanzer’s home, which was under construction. The contract, which was for a custom home theater, music, phone and lighting system, itemized the pricing for the contract into components that included equipment, labor, and cable, with the equipment forming the bulk of the price. A dispute developed over the functionality of some components of the Tanzer system. AVA filed suit for breach of contract to recover unpaid invoice amounts and Tanzer filed a counter-complaint. Accordingly, the court correctly ruled that Article 2 governs transactions where goods and services are bundled if “the goods element predominated.”
The court outlined four factors key to application of the predominant purpose test: (1) the language of the contract; (2) the nature of the seller’s business; (3) the purpose of the contract; and (4) the amounts paid toward the goods and services components of the contract. Although the AVA-Tanzer transaction involved a service, the installation of the smart home system during the construction phase, the court concluded that the contract was distinguishable from other construction agreements typically outside the scope of Article 2. The language of the contract, which repeatedly referred to the purchase of equipment and the installation of the components into the home, did not change the moveability of the goods sold. Moreover, AVA’s business was the sale of “smart home” components of multiple manufacturers, with installation being incidental to the sales aspect. Additionally, even Tanzer described the contract as one for electronic equipment and the contract amounts paid for the equipment far outweighed the installation charges, indicating that the contract was predominantly for the sale of goods.
- JSM
Subscribe to:
Posts (Atom)