BrightView Holdings has acquired Winter Services Inc., a snow and ice management company headquartered in Ringwood, N.J., marking another high-profile acquisition in the professional snow removal industry.

BrightView President and CEO Andrew Masterman stated the acquisition of one of the Northeast’s most respected snow and ice management firms allows BrightView to expand its services in the region and enhance its existing snow removal operations in the Tri-State Area.

“In addition to highly trained crew members, including several certified snow professionals, Winter Services brings upgraded equipment and techniques to BrightView," Masterman added. "We are delighted they have chosen to become part of our company.”

Winter Services employs 125 team members (450 during peak snow season) and serves clients throughout New Jersey, lower New York, lower Connecticut, eastern Pennsylvania and Delaware.

“We are excited to be a part of the BrightView team,” stated Winter Services owner Mark Moore. “We look forward to helping expand BrightView's portfolio and collaborating on developing best-in-class snow and ice management strategies.”

Terms of the transaction were not disclosed.

Brightview is a member of the Accredited Snow Contractors Association (ASCA) and ranked No. 2 on Snow Magazine's 2021 Top 100 List.

When everyone battled to complete their income taxes, one year-round, “self-assessed” state and local tax continues to be overlooked by many in the snow management industry.  While few snow and ice management businesses are required to collect a sales tax, frequently neglected is their liability for the related tax on the “use” of sales-tax-liable purchases.

The “use” tax affects everyone buying tax-free supplies, equipment and more online, in another state or from a seller -- that fails to pay the required tax on that purchase in the buyer’s home state.

All this fuss over a sales tax that is supposed to be collected by the seller -- but all-too-often often isn’t?  Yes, despite a ruling by the U.S. Supreme Court that requires sellers to collect sales taxes on all out-of-state sales, many transactions continue to slip through the cracks.  And, remember, ultimate responsibility for payment of those state and local taxes is on the shoulders of the purchaser.

SALES TAXES FROM BOTH SIDES

Frequently overlooked by many snow and ice management contractors, the well-known sales tax, is generally broken down into three types:

• Transaction Privilege taxes are imposed on sellers (and an increasing number of service providers) for the privilege of making sales within the state.  Sellers usually have the option of absorbing the tax, in other words, paying it out of their own pockets, or passing it along to their customers.
• Sales taxes are the basic, more familiar transaction tax, calculated as a percentage of the sales price of taxable goods and some services.  The sales tax is usually collected by the seller on behalf of the taxing authority.  Because the tax is primarily the buyer’s responsibility, unlike transaction privilege taxes, sellers don’t have the option of absorbing the tax.
• Retail transaction taxes are imposed on the sale transaction itself, with the primary liability for paying the tax falling on both the seller and the buyer.  Sellers are responsible for collecting and paying the tax, while buyers are responsible for paying any tax which should have been collected and remitted but wasn’t.The majority of states have a basic sales tax, where the buyer bears the legal burden of the tax and the seller is required to collect and remit the tax to the state.  Only a few states have the seller privilege tax option.  From the perspective of the buying snow contractor, understanding the type of tax they are confronting can help in dealing with sales taxes that are not billed or collected.
  

When dealing with a transaction or vendor privilege tax, for example, no contractor or snow and ice management business should voluntarily pay any tax that hasn’t been billed to them because the tax is the seller’s responsibility.  Obviously, when dealing with a consumer excise or retail transaction tax, unbilled taxes should not be ignored.

Unless there is some written proof that the tax was paid, the snow removal operation, the buyer, can be held liable for the unpaid tax.  Which brings up the so-called “use” tax imposed in 45 states but actually paid by less than two percent of those required to pay on taxable transactions where sales taxes were not collected by the seller.

USE TAXES
Where there is a sales tax, there is usually a use tax.  The use tax typically applies only to purchases where no sales tax was collected.  

In most cases, the use tax applies when a taxable item is sold in another state where there may be no sales tax or the seller doesn’t have sales tax “nexus.”  Without nexus the seller is not responsible for remitting sales tax on the purchase to that other taxing jurisdiction -- at least that was the case prior to the Supreme Court’s decision in the South Dakota v. Wayfair, Inc. case.

On June 21, 2018, the U.S. Supreme Court ruled states can require an out-of-state seller to collect and remit sales tax on sales to customers in another state even if the seller has no physical presence in the buyer’s state.  All-too-often sellers fail to comply leaving buyers liable for the unpaid sales tax.  In even more cases, the snow and ice management operation becomes liable when items acquired “free-from-tax” are converted to a taxable use.

USING FORMERLY SALES TAX-FREE SUPPLIES AND GOODS
It can be as simple as a printer or copy shop pulling a ream of paper off the shelf for use in their office.  Another business might find itself owing a use tax for charitable donations of previously non-taxable goods or products intended for resale to raffle off at a charitable auction.

Under the majority of state laws, it is how certain goods, products or commodities in the business are “consumed” that is usually the determining factor in determining use tax liability.  Common triggers include the already mentioned charitable donations along with:

• Inventory transfers
• Promotional giveaways, and
• Fixed asset purchases

If items were intended for resale and no sales tax was paid at the time of purchase, the business is obligated to pay the use tax.  Or, if equipment or office furniture was purchased for the operation, which then moved to a new location where the tax rate may be higher, the difference in use taxes may be owed.
The use tax must also be paid when a snow removal contractor purchases a taxable item in jurisdictions with a lower tax rate than the rate in the state where they do business.  If the operation buys a vehicle in Oregon where they have no sales tax, for instance, they’re likely to owe tax in their home state.  Purchases made in other countries are also subject to use taxes.  Regardless of the situation, the burden to report and pay lies on the buyer.

A COMPLEMENTARY TAX
State and local use taxes are designed to be no broader in scope than the sales tax and carry the same rate.  Their rate is left up to the state or local tax authority where the snow removal operation or business uses, stores or consumes the purchased item.  

The basis for computing the use tax is generally the “selling price” of the property -- just as it is for the sales tax.  For the most part, exemptions are also the same for both the sales and use taxes.

A buyer is entitled to a credit for sales taxes paid.  Buyers are generally allowed a tax credit for sales taxes paid to another state for the same property.  In other words, use tax liability can be offset by sales tax paid on the purchase.

SELF-PAYING
Use taxes are self-assessed.  The biggest difference between a state’s sales tax and its use tax is the manner in which they are assessed and paid.  For the most part, sales taxes are assessed and collected by the seller.  In contrast, the responsibility for reporting and paying any uncollected taxes generally falls on the buyer.

Because the triggering event for the tax -- the taxable “use” of the property in the state -- occurs after the sale is completed, use tax is owed by a buyer every time sales tax is not paid in full by the seller.  Unlike the sales tax, the use tax can be triggered after a transaction, based on how and where products/items are used by the buyer.

Many snow and ice management businesses regularly purchase supplies, goods, products and even equipment out-of-state, business-to-business or via the Internet.  State and local lawmakers, aware of this strategy, long ago included a “use” tax on otherwise taxable purchases made outside their jurisdictions to avoid sales tax.

CHECKING TWICE
Checking that expenses, fixed assets and inventory transfers have been properly taxed is how many auditors spend their time.  It is also where most mistakes are easily discovered.  After all, the systems used by snow removal operations to track their spending are often the same systems auditors use to discover tax liabilities.

State auditors claim sale and use tax errors are the number one audit target with the bulk of assessments coming from the use tax not being paid.  Failing to report use tax is easily detected by auditor and, obviously, can prove expensive.  So, why do so many contractors overlook the use tax?  

Often their complacency derives from not understanding the use tax rules or the necessity of paying it.  Thus, every snow professional should avoid removing purchased items from inventory without either paying the necessary sales tax or remitting the use tax to the state or local taxing agency.

Ultimately, it is the snow removal business that is responsible for ensuring the sales and use tax rules are handled correctly.  Vendors don’t always get it right so if a sale is exempt, a valid resale or exemption certificate should be referenced.

And, don’t forget to verify tax rates are correct.  Compare the tax shown on the invoice with what should have been collected.  Be sure expense reports include sales tax for any taxable transactions, since these are all areas where auditors find mistakes.

Mark E. Battersby is Snow Magazine's finance and accounting writer. He resides in Ardmore, Pa., and can be reached at MEBatt12@Earthlink.net

While 2021 brought major changes to the workplace with respect to mask and vaccination mandates, recent actions taken by federal and state legislatures suggest that even more changes are coming in 2022, one of which pertains to the enforceability of noncompete agreements and other restrictive covenants.

In July 2021, President Biden issued an executive order encouraging the FTC to curtail the unfair use of noncompete agreements. To date, the FTC has not issued any new regulations in that regard, though it did recently release its draft Strategic Plan for Fiscal Years 2022-2026 in which it listed “increase use of provisions to improve worker mobility including restricting the use of non-compete provisions” as a goal.

While substantive Federal action remains pending, a number of states have taken matters into their own hands, promulgating new laws that significantly restrict the use of noncompete agreements:

• Nevada’s recent amendment to the Nevada Unfair Trade Practice Act took effect in October 2021, prohibiting non-competes for hourly employees and prohibiting employers from bringing lawsuits to restrict former employees from providing services to former customers so long as the former employee did not solicit the former customer. Illinois passed a similar bill which went into effect on January 1, 2022, which prohibits non-competes for employees earning less than $75,000 per year and non-solicitation agreements for employees earning less than $45,000 per year.
• Colorado has taken a more stringent approach, voiding non-competes and non-solicitation agreements with certain exceptions, and making conduct that could be deemed a threat or other means of intimidation to prevent a former employee from engaging in a lawful occupation as a misdemeanor subject to jail time.

As new legislation is enacted, employers should evaluate whether and to what extent their non-competition and non-solicitation agreements are enforceable in the jurisdictions in which they operate and whether they have taken appropriate steps in jurisdictions with minimum earnings thresholds, particularly those in which thresholds are adjusted annually such as Maine, Rhode Island and the State of Washington, which took effect on January 1, 2022 or will take effect in early 2022.

Sean Riley is a Partner in Freeman, Mathis and Gary LLP's Pittsburgh office and also works in the Philadelphia and Cherry Hill offices on a regular basis in handling his regional practice. His ability to evaluate claims and develop thoughtful strategies and themes repeatedly has led to successful outcomes in state and federal courts.

It's a smart and solid practice to routinely review the procedures for protecting and safeguarding your company’s data. This includes making sure you’re compliant and ready to meet any challenges or attempted breaches that may lay hidden just over the horizon.

With ransomware attacks, data breaches, and other security incidents on the rise, this is an area that demands serious attention now more than ever. So, attorneys contact?David Cole, Nicholas Jajko, and Heather Kuhn in the?Data Security, Privacy & Technology practice group at the law firm of Freeman Mathis and Gary LLC have compiled the top ways to best prepare your snow and ice management business.

• Verify that your critical data is being backed up regularly, stored offsite, and capable of being restored quickly to protect against damage by ransomware attacks.
• Audit all systems to ensure they are fully patched and running the latest version of software to mitigate the risk of a cybersecurity attack due to open vulnerabilities.
• Review and update your Incident Response Plan or create one if you don’t have one yet.
• Rehearse your incident response procedures through a tabletop exercise.
• Review and update your Terms of Use and Privacy Policies on your website to make sure they align with your current practices and comply with applicable laws.
• Review your Written Information Security Plan (WISP), or develop one if you don’t have one, to comply with state or federal law requirements.
• Purchase cyber liability insurance to cover privacy event expenses for incidents like data breaches or ransomware attacks, as well as potential liability for third-party claims, or review your existing policy to ensure it provides adequate coverage for your organization’s risk.
• Review your data collection, use, storage and deletion practices for compliance with all applicable privacy laws such as the existing laws in California (and the amended law going into effect January 1, 2023) and the European Union, plus new privacy laws in Virginia and Colorado. 

Taking proactive steps like these gives your organization the best chance to protect against the ever-increasing threats to cybersecurity, as well as the confidence to use data to add value rather than be afraid of it. And be sure to reach out to a cybersecurity professional if you have any questions on how new and existing privacy and security requirements impact your organization, or if you need guidance on any of the recommended actions above.

Snow Magazine contributors and attorneys?David Cole, Nicholas Jajko, Heather Kuhn are part of Freeman, Mathis and Gary LLC’s Security, Privacy & Technology practice group.??