A 5-4 decision was made on Thursday, June 21st deciding the fate of a sales tax collection requirement for online retailers. The court decision allows states to impose sales tax collection requirements on online retailers with no physical presence, ...

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Supreme Court Decides Landmark Wayfair Case

A 5-4 decision was made on Thursday, June 21st deciding the fate of a sales tax collection requirement for online retailers. The court decision allows states to impose sales tax collection requirements on online retailers with no physical presence, which was previously prevented by the 1992 case Quill Corp v. North Dakota. In its Wayfair decision, the Court found Quill to be “unsound and incorrect.”

With the overturn of Quill, online retailers will no longer have an advantage over brick-and-mortar stores in not charging sales tax to their customers. Many large online retailers already collect state sales taxes, but smaller online retailers will likely be affected by the decision. Shares of Wayfair and several other large online retailers dropped with the announcement of the decision.

In the past few years, several states have begun to push the boundaries in attempts to collect sales tax from online retailers. South Dakota had imposed the requirement on any out-of-state seller that delivers more than $100,000 in goods or services to the state or has 200 or more transactions. This requirement led South Dakota to sue Wayfair and two other large online retailers, which is what led to the overturn of Quill.

It is likely now that a round of new states will begin to pursue an avenue to enforce collection requirements on online retailers selling into their state. There is potential that this leads to follow-up litigation as states decide where the line should be drawn for imposing such collection requirements.

Please join us for our annual State and Local Tax Update webinar on July 26th at 2 p.m. as we further discuss the effect of this monumental decision. You can learn more and register by clicking here.

For questions regarding this article, or our upcoming webinar, please contact McKonly & Asbury Senior Tax Manager and SALT Leader, Michael Eby at meby@macpas.com or Tax Supervisor, Lindsey Waltemyer at lwaltemyer@macpas.com.

 

McKonly & Asbury Donates Time to Central PA Food Bank

Earlier this week, McKonly & Asbury joined together our recruiting efforts with our commitment to Purpose Through Profits by partnering with Central Pennsylvania Food Bank in their efforts to #FightHunger.

As part of our firm’s recruiting initiatives, we conduct an Externship Program each year. This program is designed to give students an opportunity to experience and learn more about our culture at McKonly & Asbury over a series of events from May through July so they can observe what a career as a staff accountant/staff consultant at McKonly & Asbury is like.

The most recent event for the Externship Program allowed the externs to experience teamwork first hand, while giving them a preview of how important Purpose Through Profits is to our team as externs and McKonly & Asbury buddies helped pack and sort food for such an important organization in the community, and one of our clients, the Central Pennsylvania Food Bank.

During their time at the Food Bank, the students and McKonly & Asbury team members packed 160 military share boxes that will go to deserving veterans, counted out 970 watermelons for inventory, and counted and packed 210 pounds of pretzels as well as over 4,000 pounds of carrots into single family servings to be given out to families in need!

Thank you to our 2018 Externs and all of our team members who donated their time to help the Central Pennsylvania Food Bank in their efforts!

 

Webinar – 2018 Pennsylvania Tax Update

McKonly & Asbury’s July webinar entitled “2018 Pennsylvania Tax Update: The State Budget, Legislation, and Multistate Tax Planning” will take place on Thursday, July 26, 2018.

The webinar will be hosted by McKonly & Asbury Senior Tax Manager and SALT Leader, Michael Eby, and Tax Supervisor, Lindsey Waltemyer.

This webinar will provide an overview of the enacted 2017-2018 Pennsylvania State Budget, including a summary discussion of what tax items have been on the table for negotiation during the past few years. Other related discussions will be subject to the budget being timely passed.

During the second leg of the webinar, we will provide a brief update on recently passed Pennsylvania tax legislation and court decisions of interest, and will then look ahead at how some of the tax legislation passing in other states may soon be coming to Pennsylvania.

Finally, Federal tax reform was a truly once-in-a-generation overhaul of the tax code and has rightly garnered most of the attention over the past few months. How are states, including Pennsylvania, addressing these changes at the Federal level in their own respective tax structure?

During this webinar, attendees will:

  • Gain a general understanding of what the 2018-2019 Pennsylvania State Budget (passed or pending) entails, with specific highlights of items affecting business and individual taxes.
  • Receive an update on recently passed Pennsylvania tax legislation, pertinent cases, proposed legislation, and Department of Revenue publications.
  • Obtain an overview of the multi-state tax landscape and how it may affect businesses with operations outside of Pennsylvania, including the landmark Wayfair case.
  • Hear a discussion concerning how Federal tax reform is affecting state taxation across the nation, including in Pennsylvania.

 

Additional Details

Thursday, July 26 at 2 PM EST

 

This free, one hour-long webinar will take place on Thursday, July 26th at 2:00 p.m. EST. One “Tax” CPE credit is available for this webinar. The level for this CPE is intermediate/overview and there are no prerequisites for this CPE. This program is a live webinar which offers you the opportunity to ask questions and interact with the presenters.

We look forward to you joining us for this webinar! Remember to visit our events page which contains details on all upcoming and past events and subscribe to our news blog.

 

Tips for Effective Sexual Harassment Prevention Training

While many companies already offer some form of sexual harassment prevention training, the current climate of media attention and public outcry on the topic warrants a closer look at how employers can improve this type of training in an effort to promote a safer workplace for all. According to the EEOC’s 2016 report, only 10% of individuals who feel harassed file a formal complaint. This isn’t to suggest that sexual harassment is on the decline but rather individuals aren’t coming forward for reasons ranging from fear of not being believed, no action will be taken, or they will be retaliated against. As EEOC spokesperson Christine Nazar’s states, “Companies have had sexual harassment training for decades, but it clearly hasn’t been effective.”

According to the EEOC, those organizations who solely focus on compliance-based training to limit legal liability are falling short on actually changing the work environment and ultimately the employee’s behavior. So what steps can an employer take to ensure the training is effective?

What’s in a name? Rebrand the training

Of course your training should focus on sexual harassment, including what it is, various reporting mechanisms within your organization, and ultimately how to prevent it; however, be sure to focus on behaviors you want to encourage such as discussing what a respectful and inclusive workplace looks and feels like to your participants. Change the name of the training and modify its content. Drill down on those positive behaviors to set the stage for a civil, respectful work environment. Civility training includes respectful communication both in-person and electronic means, giving and receiving constructive feedback, and how to resolve conflict. The EEOC has additional information and resources on their website.

Message from CEO (and!) participation from senior leaders

It sounds cliché but so true…change starts from the top of the organization. If the CEO and senior leaders aren’t taking the subject seriously, neither will your employees. If the message only comes from HR, it can scream of a “checking the compliance box” mentality and simply going through the motions. Your employees sense this. A best practice is to have a brief message from the CEO tying the training to core values and setting the tone from one of pure legal compliance to doing the right thing:  our values and culture means that we treat each other with mutual respect. This can be a brief video recording or in-person speech.

Your senior leaders should endorse a respectful environment by treating the training accordingly. Senior staff who evade attending training are sending a strong message to employees with potential far reaching repercussions. The most obvious message is that the subject is really not that important to make time in his/her schedule for the training. The potential hidden message to your employees is that the senior leader doesn’t take harassing conduct in the workplace seriously. Fast forward…if an employee witnesses behavior or is the target of unwelcome behavior in the future, what are the chances he/she will seek out that senior leader to have a conversation about the incident?

Make it specific to your company

A blended approach of online training and in-person sessions can meet the needs of a diverse workplace and workforce. According to the EEOC, training should be interactive. For a topic that can be somewhat uncomfortable to discuss, online or in-person interactive training can meet these needs.

Many third-party, off-the-shelf courses are less expensive than a customized solution, but they run the risk of not applying to your organization. This disconnect could create the perception that the training isn’t realistic or relevant, isn’t helpful, and, as a result, employees dismiss the training altogether. The message from your CEO is a first step in personalizing your training. Where possible, assessments and role playing should be specific to your company or industry. Give examples of interactions employees could encounter with employees, vendors, customers, etc.

Encourage participation by showing what it means to them

Engage your employees by making the training specific to their role in preventing harassment. Brian Westfall’s article points to an interesting study that found trainings focused solely on harassers or victims are rejected by employees because they don’t feel the labels apply to them.

Role playing with specific examples as part of the training can give your employees the knowledge and tools to know how to report behavior whether they are a manager or what to do if they are a bystander witnessing behavior. As part of the training resources the EEOC provides, they advise employers to include specific training on bystander intervention.

Separate training for managers

It is worth mentioning that managers have special responsibilities when it comes to harassment in the workplace. In addition to the training provided to employees – including interns – managers should be educated as to these obligations when it comes to sexual harassment. While the legal compliance portion may send a loud, clear message to managers, ultimately they need to understand the tools and resources available to them to create a respectful work environment for the employees they lead and manage. For more information, see SHRM’s article.

Make it count: use short, impactful chunks of training

States like California and Connecticut require two hours of sexual harassment prevention training every two years, but mandating a two-hour training session all at once can be a barrier to employee participation (not to mention engagement). There are benefits to breaking out various topics into meaningful micro-learning sessions covering sexual harassment prevention. Employees are only away from work for minutes at a time not to mention various research has shown participants can retain information better by completing training in shorter sessions.

It all comes back to culture…

Finally, in order for changes to be lasting and impactful with the goal of preventing harassment in the first place, employers need to take a look in the mirror at the organizational culture that leadership is creating. Training can’t exist in a vacuum: it will only be as effective as the culture that supports it. Leaders should think about what a respectful culture looks like in their organization and how to “walk the talk” (for example, demonstrate open door policies; encourage professional, meaningful communications; reward positive behaviors; appropriately handle complaints and conflict; provide consistent supervisory/management training, etc.). Respect leads to trust. Hopefully that trust can further open the channels for communication between employees and leadership and ultimately resolve any potential sexual harassment (or any harassment) issue early on. Perhaps a different culture would have led to a better outcome for the 90% (as reported by the EEOC) who didn’t report harassment to their employers.

For more information, please contact Suzanne Sentman, Human Resources Director at ssentman@macpas.com.

 

Cybersecurity and Employee Benefit Plans

Many plan sponsors and service organizations use electronic means to store and update participant records (which likely contain personally identifiable information), to conduct financial transactions for the plan (such as the remittance of participant and/or plan sponsor contributions), and to interface with participants (for example, permitting participants to electronically initiate a new loan or request a plan distribution). Because of this, plan administrators may be vulnerable to cyber-attacks and thus exposed to risks related to privacy, security, and fraud. It is a common misconception that anti-virus and anti-spam software protects plan administrators from these risks and that involving third party administrators (TPAs) to handle plan-related transactions is sufficient to tackle cybersecurity related concerns. However, considering all the potential threats involved, relying solely on software or TPAs does not ensure that sensitive plan data is protected against potential cyber-attacks.

To protect plan information from cyber-attacks, plan administrators and those charged with governance must exercise their fiduciary responsibility and implement processes and controls that restrict access to a plan’s systems, applications, and data, including third-party records and other sensitive information. Specifically, plan administrators should:

  • Review written information security policies, including those regarding encryption;
  • Conduct periodic audits to detect threats;
  • Perform periodic testing of backup and recovery plans;
  • Determine responsibility for losses, including adequacy of cybersecurity insurance coverage; and
  • Establish training polices to reinforce data security.

As part of their ERISA duty to monitor plan service providers, plan administrators should also understand how their service providers store and protect the participant data that they handle. This includes:

  • Discussing with the service providers their policies and procedures relating to data security, including passwords, use of social media, document retention, internet privacy, and other relevant issues.
  • Understanding the service providers’ procedures for breach notification, including any obligations they may have to notify participants or governmental authorities.
  • Reviewing the service organization’s SOC 1 and SOC 2 reports. A SOC 1 report addresses a plan’s internal control over financial reporting; however, it does not address broader entity cybersecurity controls and risk. A SOC 2 report, on the other hand, specifically addresses the cybersecurity controls and risks in the system used by the service organization to provide such services to the plan. It may also address controls relevant to the service organization’s ability to maintain the confidentiality or privacy of the information processed by the system.

The overall responsibility to ensure security over employees’ confidential information and plan-related transactions resides with the plan administrators; therefore, it is very important that they take all the necessary steps needed to ensure cybersecurity.

For more information about McKonly & Asbury’s Employee Benefit Plan services, or for questions regarding this article, please contact Stephanie Kramer, Supervisor with McKonly & Asbury, at skramer@macpas.com.

 

 
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