NC Department of Revenue advises on Sales Tax law

Thanks to the NC Constuction News for the heads-up on this...

On March 17, 2017, the North Carolina Department of Revenue published an advisory notice that provides the most extensive and detailed guidance to date for the construction industry on what is, and is not, covered by the "capital improvement" and "repair, maintenance, and installation services" categories of the recently amended sales and use tax laws.  While explicitly disclaimed that it is "not specific tax advice," the chart in the bulletin breaks down various construction categories, and indicates whether activities applicable to that trade or activity are capital improvements or RMI services.  

This blog would strongly recommend bookmarking to the notice if any construction business has questions about application of the sales and use taxes in North Carolina.


Employee Misclassification Update: North Carolina Signs MOU With U.S. Department of Labor

Over the past year, our firm has monitored the issue of employee misclassification in the state and proposed bills in the legislature addressing the issue.  We have previously posted articles monitoring and updating information, and we presented a short update on misclassification at our annual Summer Construction Conference.  Today we bring another update regarding ongoing questions surrounding the State’s efforts to combat employee misclassification.

As a recap, employee misclassification occurs when an employer knowingly or mistakenly classifies an employee as an independent contractor.  This classification has certain consequences for wage reporting, taxes, and workers’ compensation requirements, among others.  The practice of misclassification in the construction industry is estimated to cost North Carolina over $450 million every year in lost tax revenue.  Furthermore, businesses that misclassify workers have lower operating costs, allowing them to underbid competitors for jobs.  One of practical benefits of combating misclassification to the NC construction industry is that it creates a level playing field for all employers. 

On August 31, the NC Industrial Commission signed a Memorandum of Understanding (MOU) with the U.S. Department of Labor’s Wage and Hour Division (WHD) to better combat and prevent employee misclassification in the state.  The Industrial Commission’s Employee Classification Section is responsible for identifying businesses within the State suspected of misclassification.  The MOU allows the Employee Classification Section and WHD to share data on companies suspected of misclassification and permits collaboration between the agencies during investigations.  The Employee Classification Section is responsible for distributing this information to other state agencies, such as the Department of Labor, Department of Commerce, and Department of Revenue.  The agencies believe this MOU will help increase employers’ compliance with paying state and federal taxes, federal wage payment laws, workers’ compensation requirements, and unemployment benefits.

By signing this MOU, North Carolina joins 32 other states currently collaborating with federal officials to prevent employee misclassification.  For more information about misclassification of employees as independent contractors and what this MOU could mean for your business, please call us at (919) 828 – 1396.


Cool Construction: Freeways that generate electricity

The AGC Smartbrief provided the original link to a story from KCRA-TV, a Sacramento (CA) news station:

“When cars drive along roads, they vibrate the roads; and it sounds like science fiction, but scientists have developed a material that gets a charge simply from the vibration of a car or truck,” Assemblyman Mike Gatto, D-Glendale, explained.

It's known as piezoelectric technology. Gatto introduced the idea to state lawmakers in 2011 after learning these tiny sensors were being used to generate electricity in Israel, Italy and Japan.

“We could use our roads to generate power and maybe that power could be sold,” Gatto said. “And God forbid, we actually pave some of those roads -- which are in terrible shape.”

According to the story, a 1.5 mile stretch of two-lane highway could generate enough electricity to power 1,000 homes.

The concept of piezoelectricity involves using crystals to convert mechanical energy into electricity.  The application of installing sets of the crystals into roadways dates back almost a decade, with installations such as this project in Israel.  The California Energy Commission studied the application in a 2014 report, which recommended extended field tests to determine the costs and benefits of highway installation.  Now, according to reports, the Commission is prepared to fund multiple pilot projects throughout California.

Piezoelectricity has other fun applications too.  The Temple Night Club, a certified "sustainable" dance club in San Francisco, installed a piezoelectric dance floor, where the dancers power the flashing LED lights built into the floor.



PPP Update: UC Merced announces Development Team

From Nossaman's Infra Insight blog, by Yukiko Kojima and Frank Liu:

The University of California regents announced last week that it had selected Plenary Properties Merced as the successful proposer for the UC Merced 2020 Project.  The team includes Plenary Group as the equity member, Webcor Builders as the lead contractor, Skidmore Owings & Merrill as the lead planner, and Johnson Controls as the lead operations and maintenance team.

The project is the first higher education availability payment P3 project to be awarded in the United States, and may well serve as a template for future higher education capital projects, both within the UC system and nationally, if successfully completed.  “UC Merced, the youngest campus in our system, is poised to become a model for our other campuses as we look for the most efficient ways to construct, operate and maintain facilities that enable us to pursue our teaching, research and public service missions,” said UC President Janet Napolitano.

The scope of the public-private partnership is also significantly larger than any other public facilities project in the U.S., and is intended to nearly double the capacity of the campus, and permit a nearly 50% increase in student capacity within five to seven years.

For more information about the UC Merced 2020 Project, click here.  


Drone Law Update: The Regulations

On June 21, the Federal Aviation administration published the final regulations for commercial use of unmanned aircraft systems ("UAS"), which most of us know as "drones."  Transportation Secretary Anthony Foxx announced:

“We are part of a new era in aviation, and the potential for unmanned aircraft will make it safer and easier to do certain jobs, gather information, and deploy disaster relief.  We look forward to working with the aviation community to support innovation, while maintaining our standards as the safest and most complex airspace in the world.”

The rules require keeping the vehicle within visual line of sight, and permit operation only in daylight and during twilight (if the drone has anti-collision lights).  The FAA has also set up a waiver procedure for some portions of the regulations, and will have an online portal available to apply for the waivers.

FAA Administrator Michael Huerta explained the fact that these rules are the beginning of the process, and not the end:

"With this new rule, we are taking a careful and deliberate approach that balances the need to deploy this new technology with the FAA’s mission to protect public safety.  But this is just our first step. We’re already working on additional rules that will expand the range of operations.”

The FAA's regulations do not cover privacy or information gathering issues, but the administration announced in its press release that it will attempt to educate all drone pilots regarding local and state government laws, as well as the National Telecommunications and Information Adminstration's privacy "best practices" model.

To read the entire rule, click here.  For the FAA's Fact Sheet, click here