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Link: License Application Status Check
Have you been wondering about the status of your General Contractor's license application with Georgia? Well wonder no more. You can check the status of your application at this website. You will need your federal identification number or social security number to access the system.
Link: From Where I Sit: Why You Should Welcome Trouble.
You may wonder why a blog targeting the construction industry would include the CEO of a publishing company on its blog roll. Read this post from Michael Hyatt and you will see that his take on life can be beneficial to everyone, regardless of your profession.
You may or may not be aware of the the Georgia code that requires prime contractors to withhold 4% of all payments to their subcontractors unless the subcontractor provided a sales & use tax bond or a letter from the Georgia Department of Revenue confirming that all sales tax owed by the subcontractor had been paid. This withholding requirement no longer applies to resident subcontractors. Following is an article from Hendrick, Phillips, Salzman & Flatt, an Atlanta law firm that serves construction contractors:
Previously, the prime contractor had been required to withhold 4% of the subcontract amount for every subcontract unless and until (1) the subcontractor had posted with the tax commissioner a “sales and use” tax bond or (2) the subcontractor had obtained a “certification” from the tax commissioner attesting to satisfaction of all such tax liabilities relative to its work under the subcontract. Now this requirement only applies to large amount subcontracts with "nonresident” subcontractors. After languishing for more than a year after its introduction, this bill was substantially modified at the very last minute and rushed through the legislative process with, apparently the assistance of legislator “friends in high places” to modify the practice and requirements for general contractor “withholding” of payments otherwise due to a subcontractor to assure full satisfaction of all “sales and use” tax obligations relative to the subcontractor’s work.
Now, under this modification, this withholding requirement only applies where the “total amount” of the subcontract or subcontracts between the prime or general contractor and a particular subcontractor on any one project exceeds $250,000.00, and where the subcontractor is a “nonresident” of Georgia; For purposes of this statute, a “nonresident subcontractor” is defined a person “who does not have a bona fide place of business in Georgia through the maintaining of a permanent domicile or business facility engaged in contracting real property” including lower tier subcontractors. Of course, any such withholdings will still be subject to the bonding and certification requirements that previously had applied to all subcontractors.
But general contractors no longer need – or are required or allowed - to withhold the 4% sales and use tax from subcontract monies due a “resident” subcontractor. Under this new law, the messy and complicated administrative process is no longer applicable to subcontracts with subcontractors who are Georgia“residents.”
If you are a contractor performing work for public entities this is a must read! Following is an alarming article from Contractor Tools and Supplies magazine:
Withholding provision poses major threat to construction contractors
Dave Meyer, founding partner of The Meyer Companies in Lee’s Summit, Missouri, is the 2007 national chairman of the Associated Builders and Contractors (ABC). He has written the following position paper that’s very interesting on a facet of the new tax laws. As it stands now, it will greatly affect contractors and their ability to manage cash flow and compete effectively:
On May 17, 2006, America’s small businesses cheered as President George W. Bush signed into law a bill providing a number of vital small business tax relief measures, such as extended lower capital gains and dividend tax rates, Section 179 expensing and a one-year Alternative Minimum Tax fix.
However, many small business owners stopped cheering when they realized that the bill, the Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-222), included a provision requiring that 3 percent be withheld on all payments for goods and services made to federal, state and local contractors starting in 2011. The withholding applies to the total contract, not to the net revenue generated from a project. For construction contractors, this means the government is withholding funds necessary to complete a project, including funds needed to pay subcontractors and suppliers.
The Section 511 provision was added during conference negotiations as a “revenue raiser,” and was not included in either the U.S. Senate or U.S. House of Representatives versions of the bill. The provision was slipped into the P.L. 109-222 conference report with the intention of increasing tax law compliance and helping to close the “tax gap”—the difference between the amount of tax that taxpayers should pay for a given year and the amount that is paid voluntarily and in a timely manner. According to a Government Accountability Office report released last year, more than 3,800 federal contractors had tax debts totaling $1.4 billion.
While this figure is troubling, the potential impact of the 3 percent withholding on small businesses—construction firms in particular—is devastating. The withholding is larger than the profit margins permitted under many government contracts and will significantly impede cash flow, hampering a firm’s ability to compete for business, or even complete projects. Companies with tight margins or irregular cash flows will lose critical funds for day-to-day operations and will be at a competitive disadvantage in the bidding process. Small businesses will be forced to raise their bids for federal contracts to offset cash-flow issues related to the withholding, making their offers more expensive and less attractive.
In addition, the withholding will create an enormous administrative burden for contractors and government alike. In fact, the Congressional Budget Office reported last May that the costs of administering the 3 percent withholding constitute an unfunded mandate on state and local governments because they exceed the $50-million annual threshold established in the Unfunded Mandates Reform Act.
Although the withholding does not kick in until 2011, my association, Associated Builders and Contractors (ABC) is already taking action to ensure that the provision is never enacted. ABC has formed the Construction Organizations for Sensible Taxation (COST) Coalition, a group of nine construction industry organizations led by ABC that support the repeal of Section 511. The coalition strongly supports legislative efforts to remove the provision, such as measures introduced in the last Congress by Sen. Larry Craig (R-Idaho) and Rep. Wally Herger (R-Calif.) that would have repealed Section 511. The coalition is currently working with lawmakers to ensure similar legislation is introduced in the 110th Congress.
Additionally, ABC and its industry partners are fighting to prevent Congress from using the 3 percent withholding to fund government programs in the short term. In the final days of the 109th Congress, lawmakers proposed accelerating the implementation date of the provision from 2011 to 2007 in order to pay for a rural schools initiative. ABC led the charge on Capitol Hill and within the contractor community to oppose the withholding offset, working closely with Reps. Kenny Hulshof (R-Mo.) and Lynn Westmoreland (R-Ga.) to successfully defeat the revised timetable. ABC anticipates that similar efforts will be made in the 110th Congress to use the 3 percent withholding as a means to fund government programs.
Until Section 511 is repealed, America’s small business contractors must remain on guard. The potential effects from this provision are staggering—reduced competitiveness, huge administrative headaches, increased debt and higher costs. And as the cost of doing business with all levels of government climbs, the added expense will be passed along to American taxpayers.
Ken Simonson is the chief economist for the Association of General Contractors. Attached is his Quick Facts about the Construction Industry:
The due date for C Corporation and S Corporation tax returns is fast approaching...the due date is March 15th. These returns are eligible for an automatic extension until September 15th. You must file Form 7004 to get the automatic extension.
It is important to note that an extension does not extend the time for paying your taxes. It only extends the time for filing your return. Any corporate income taxes for 2006 must be paid by March 15th to avoid late payment penalties and interest.
Link: Excel Tip: Wrap text as you type with Alt-Enter - Lifehacker.
Quickie Excel tip: When you're typing text into a cell, by default hitting Enter takes you to the next cell. However, to wrap your text in the current cell as you type? Press the Alt key and the Enter key at the same time.
Following is an announcement from the IRS:
Check to see who qualifies for the telephone excise tax refund. Statistics show more than 10 million early filers did not request the one-time refund. And nearly half of those returns — more than 4.8 million — were completed by a tax preparer. Spend a few extra minutes reviewing tax returns to make sure requests are accurate. For more, see news release IR-2007-40.
The average refund is $30 to $40...every little bit helps!
