1. Allows spouses to enter into postnuptial contracts;
2. Allows spouses to amend prior Prenuptial Agreements

Senate Bill 210 becomes effective on March 23, 2023. It will allow individuals to protect their financial circumstances that may have changed since the date of marriage. For example, Postnuptial Agreements can be beneficial if one spouse unexpectedly comes into an inheritance or acquires a thriving business.

Alternatively, if a marriage is rocky and one spouse has a flourishing career, he/she might feel that it’s financially advantageous to divorce immediately. A Postnuptial Agreement can remove pressure, provide a safety net, and allow parties to work on their marriage without worrying about the financial repercussions of staying together.

Furthermore, Postnuptial Agreements can benefit individuals who previously entered into a Prenuptial Agreement, and now wish to adjust the terms to be more in-line with their current circumstances.

The requirements for a valid Postnuptial Agreement are the same as those of a Prenuptial Agreement.

A Postnuptial Agreement will be valid if:

• It is in writing and signed by both spouses;
• It is entered into voluntarily, without duress, fraud or coercion;
• Both parties fully disclose their financial circumstances, including all their assets and liabilities;
• The terms do not encourage divorce.

Senate Bill 210 will empower married Ohioans to manage their financial circumstances in the event of death and divorce. Additionally, it will allow married individuals to formulate a customized division of their estate, rather than being subject to state law.

For more information or to seek counsel from our family law group, reach out to request a consultation or call us at 216-696-1422.

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What does state use tax apply to?

Generally, the purchase of tangible personal property is subject to use tax if sales tax is not applied at the time of purchase. Common items assessed during audits include:

• Office equipment, computers, scanners, printers, monitors
• Office supplies, such as paper, file folders, and writing instruments
• Office furniture, such as desks, chairs, lamps, and TVs
• Janitorial supplies, such as gloves, towels, mops, and buckets

Use tax also applies to certain taxable services, including:

• Landscaping and snow removal
• Installation and repairs
• Janitorial services and extermination
• Automatic data processing
• Storage
• Maintenance
• Employment placement

What doesn’t use tax apply to?

There are fifty-six (56) enumerated exceptions, with subparts, in the sales tax statute that also constitute exceptions to use tax. Each exemption is very specific and requires an analysis of facts and circumstances. Important exemptions worth mentioning include property acquired to be used directly in, or as an adjunct to, the manufacturing process; food; items sold to governments or charities; and certain utilities unless they are delivered by a broker.

Because of the fact-intensive nature of the exemptions, as well as the particular facts surrounding the uses of purchased products, it is important for businesses to collaborate with their professional advisors to determine use tax liability.

A Use Tax Audit: In a Nutshell

The Ohio Department of Taxation has increased its efforts to identify cases of missed use tax filings. If you receive notice of an audit, contact your professional advisor immediately. Do not ignore the audit notice. Audits can take years, cost thousands in fees, time, and lost opportunities, not to mention the final imposition of a tax liability, with associated interest and penalties. It is critical to enlist an experienced tax attorney that can help you defend an audit.

Compliance Tips to Consider

• Good business practices and document retention are critical to defending an audit. Businesses should document activities in a well-organized manner and properly maintain purchase orders, receipts, sales records, invoices, cancelled checks, and other records.
• An experienced attorney can provide guidance on tax compliance when purchase(s) are made that may be subject to use tax. It is always preferable to avoid an audit entirely by correctly and timely remitting state sales and use tax returns.

For more information or to seek counsel from our Taxation group, please reach out to request a consultation or call us at 216-696-1422.

The post State Use Tax for Small Businesses Overview appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

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Business and nonbusiness income are important concepts in Ohio tax law. Business income refers to the apportionable income among states where the taxpayer’s business is conducted, and it is generated from the business’ operations. Ohio nonbusiness income refers to the earnings allocated to the business’ state of domicile which is generally produced outside of normal business operations. Ohio law favorably taxes business income at a flat 3% and provides for a business income deduction. These tax treatments are not available to nonbusiness income.

Previously, the Ohio Department of Taxation’s position was that the sale of a business interest did not qualify as business income, subject to the favorable flat tax rate and business income deduction, despite the statutory definition of business income including proceeds from a liquidation of a business interest. Taxpayers that claimed business sales’ proceeds as business income, along with claiming the corresponding deduction, were challenged by the Department of Taxation, sometimes resulting in litigation.

To help resolve the disputed interpretations of liquidation proceeds and sales proceeds, HB 515 now provides two scenarios in which income from the sale of an equity interest in a business definitively constitutes business income eligible for the corresponding deduction: (i) if the equity sale is treated as an asset sale for federal income tax purposes (for example, an Internal Revenue Code §338(h)(10) election was made); or (ii) if the seller materially participated in the business activities during the year in which the business is sold, or in any of the five years preceding the sale. Satisfying either of these scenarios will enable the taxpayer to claim the business sales proceeds as business income in Ohio.

It is important to note that legislation is intended to be remedial, such that it will apply to petitions for reassessment, refund applications, and appeals pending on or after HB 515’s effective date, as well as to any sales transaction that is subject to audit on or after HB 515’s effective date.

If you are contemplating the sale of an Ohio business, we welcome the opportunity to speak with you and discuss the impact of HB 515 on your potential transaction, as well as how McCarthy Lebit’s Mergers & Acquisitions team can further assist you with a successful transaction.

Please reach out to request a consultation or call us at 216-696-1422.

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Come January 1, 2023 (or sooner), Ohioans will have access to sports betting online, at dedicated gaming facilities, and in the form of lottery sports gaming at bars and restaurants. Although it was initially expected that the OCCC would begin the licensure application process on April 1, 2022, rules governing the various licenses are still being proposed and finalized. The application process is currently expected to open in the summer/fall of 2022, but now is the time for businesses to evaluate whether they may qualify for a license and begin to prepare for the necessary submissions.

As mentioned above, Ohio will recognize three types of licenses to facilitate various sports betting opportunities:

1. Type A Sports Gaming Proprietor – Takes bets through websites and mobile applications.
2. Type B Sports Gaming Proprietor – Operates a dedicated retail sports gaming facility.
3. Type C – Includes two sub-categories:
   1. Type C Sports Gaming Proprietor – Contracts with Sports Gaming Hosts to provide sports gaming through self-service or clerk-operated terminals at approved Type C host facilities.
   2. Type C Sports Gaming Host – Owner of a facility with a D-1, D-2, or D-5 liquor permit (i.e. bars and restaurants) that is approved by the OCCC to host self-service or clerk-operated terminals for sports gaming.

Type A and Type B licenses are limited and have hefty license fees associated with them. Although the same is true for Type C Sports Gaming Proprietors, becoming a Type C Sports Gaming Host is the most attainable and least expensive.

To become a Type C Sports Gaming Host there is a non-refundable license fee of $1,000 (compared to the $100,000 fee for a Type C Sports Gaming Proprietor). The associated license will be valid for a term of 3 years that can be renewed. Because the Type C licenses utilize a different method of “lottery sports gaming”, the Ohio Lottery Commission (“OLC”) has additional oversight and regulatory authority. Accordingly, there will be rules for Type C licenses from both the OCCC and OLC, which are still being proposed and finalized.

Given the lower cost of entry, there are naturally more restrictions under discussion for Type C Sports Gaming Hosts. For example, the current rules impose a limitation of two (2) sports gaming kiosks per licensed facility, with each kiosk being limited to accepting not more than $700 in a calendar week from any individual sports gaming participant. Even with these restrictions, a Type C Sports Gaming Host license still offers a bar/restaurant the opportunity to implement a potential new stream of revenue that has never been available here before, and overall, the implementation of legal sports betting in Ohio will open the door for a multitude of new revenue streams for individuals and businesses alike.

The Ohio Casino Control Commission will be accepting applications for Type-C Sports Gaming Hosts on July 15, 2022. The deadline to submit applications is August 15, 2022.

The attorneys in McCarthy Lebit’s Hospitality and Liquor Law practice group are continuing to stay apprised of developments relating to the rules and application process for sports betting in Ohio. We are available to assist with the upcoming application process, answer any questions, or discuss needs that your business may have. For more information or assistance, please reach out to request a consultation or visit Charles’ bio for his contact information to reach out to him directly.

The post All Bets Are On As Ohio Legalizes Sports Betting appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

Businesses Eligible for the Small Business Relief Grant

Not every small business may receive an SBR Grant; only a business that meets the following criteria will be eligible:

• The business must be a for-profit entity with no more than twenty-five (25) total or full-time equivalent Ohio employees;
• The business must have a physical location in Ohio and derive at least ninety percent (90%) of its annual revenue based on activities performed in and taxable in Ohio;
• The business must have been in continuous operating since January 1, 2020 (except for government-mandated COVID-19 orders) and has the ability to continue operations as a going concern;
• The business must be in good standing with the Ohio Secretary of State, the Ohio Department of Taxation, and any other governmental entity charged with regulating the business;
• The business has experienced revenue loss or incurred unplanned costs substantially caused by COVID-19 and a grant is necessary to help it recover from the impact of COVID-19; and
• If applicable, the business has fully utilized any other government support received (including both grants and loans) by the applicant business for business expenses incurred due to COVID-19 or that can be utilized for business expenses incurred due to COVID-19.

Businesses that are not eligible for an SBR Grant include publicly traded entities, clubs, businesses engaged in the sale or distribution of liquor (excluding bars and restaurants), tobacco or vaping products, and gambling institutions, among others. Therefore, bars and restaurants may be eligible for both an SBR Grant as well as the Bar Fund (as further explained below).

Application Process and Eligible Uses for Small Business Relief Grant Funds

A business is only eligible to receive one grant under the SBR Grant program, and all entities with the same FEIN will be treated as a single business for the purposes of the determining program eligibility. With respect to the SBR Grant application, the Development Services Agency will require businesses to supply specific details and documentation concerning the business, which shall include the following:

• Number of W2 employees as of January 1, 2020, including documentation to support said number;
• Documentation to verify that the applicant business has incurred business costs during the 60-day period prior to the application being filed; and
• The business’s most recent Federal or State income tax return.

In addition, by completing and signing an application, a business certifies to the Development Services Agency and to the State of Ohio that the information, representations and certifications set forth therein are true and correct. Knowingly making a false statement on an application may subject a business to fines and/or other civil and criminal penalties.

If an application is approved and a business receives an SBR Grant, the proceeds may be used to reimburse eligible expenses associated with COVID-19 that were incurred between March 22, 2020 and the date their application was submitted. Eligible expenses include the following:

• Business supplies or equipment, including personal protective equipment for employees, customers and clients, and measures taken to protect employees, customers, or clients from COVID-19;
• Mortgage or rent payments for business premises;
• Utility payments; and
• Salaries, wages, or compensation paid to contractors or employees, including employer’s share of health insurance costs.

Costs for non-COVID related expenses are ineligible, in addition to costs incurred for tax obligations, non-business purposes, political purposes, and costs for which the business has or will receive reimbursement from another source, including any other government loan or grant program and insurance proceeds.

Awarding Small Business Relief Grant Funds

To ensure that small businesses in each of Ohio’s 88 counties receive SBR Grants, $44 million has been set aside to provide 50 businesses in each county with funding. Once a county’s allocation has been depleted, businesses will be allocated the remaining $81 million in funds regardless of their location in Ohio. In either case, applications will be approved on a first-come, first-served basis.

Businesses Eligible for Bar and Restaurant Assistance Fund

The Bar Fund was established to provide relief to 28 different liquor permit types, as shown below, which include those for bars, restaurants, breweries, distilleries, wineries, casinos and private clubs:

Licensees with any of the above-listed permits must have an active on-premise permit as of the close-of-business on October 23, 2020, however, the business does not have to be currently open. The status of a permit can be verified through the Ohio Division of Liquor Control’s online portal at https://www.comapps.ohio.gov/liqr/liqr_apps/PermitLookup/PermitHolder.aspx.

Because bars and restaurants may also be eligible for an SBR Grant, liquor permit holders could potentially receive a grant from the Bar Fund as well if they meet the specific requirements for each.

Application Process and Eligible Uses for Bar and Restaurant Assistance Funds

As part of the Bar Fund application process, a licensee will need to submit its FEIN or SSN, and liquor permit number and address for each unique location. Applications will be accepted through December 30, 2020, and after applying, a licensee will receive $2,500 per unique business location.

Once a licensee receives funds, said funds are to be used on COVID-related expenses due to business interruptions caused by the pandemic.

The post Ohio Implements New Relief Programs for Struggling Businesses appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

Amended House Bill 606, which takes effect in 90 days and lasts from March 8, 2020 through September 2021, has three significant provisions.

Healthcare Provider Tort Protection

First, a health care provider that provides health care services, emergency medical services, first-aid treatment, or other emergency professional care, including the provision of any medication or other medical equipment or product, as a result of or in response to a disaster or emergency is not subject to professional disciplinary action and is not liable in damages to any person or government agency in a tort action for injury, death, or loss to person or property that allegedly arises from any of the following: (a) An act or omission of the health care provider in the health care provider’s provision, withholding, or withdrawal of those services; (b) Any decision related to the provision, withholding, or withdrawal of those services; (c) Compliance with an executive order or director’s order issued during and in response to the disaster or emergency.

This immunity does not apply to actions outside the skills, education, and training of the health care provider, unless the health care provider undertakes the action in good faith and in response to a lack of resources caused by a disaster or emergency.

This immunity does not apply to reckless, intentional, willful or wanton misconduct, or gross negligence.

This immunity applies only to disasters or emergencies related to an epidemic and is declared to be a disaster by the federal government, the state government or a political subdivision of this state.

General Civil Liability Protection

Second, Amended House Bill 606 provides that  no civil action for damages for injury, death, or loss to person or property shall be brought against a school, for-profit or nonprofit entity, governmental entity, religious entity or state institution of higher education if the cause of action on which the civil action is based, in whole or in part, is that the injury, death, or loss to person or property is caused by the exposure to, or the transmission or contraction of, MERS-CoV, SARS-CoV, or SARS-CoV-2, or any mutation thereof, unless it is established that the exposure to, or the transmission or contraction of, any of those viruses or mutations was by reckless conduct or intentional misconduct or willful or wanton misconduct on the part of the person or place/business against whom the action is brought.

In addition, Amended House Bill 606 provides that a  government order, recommendation, or guideline shall neither create nor be construed as creating a duty of care upon any person or place/business that may be enforced in a cause of action or that may create a new cause of action or substantive legal right against any person with respect to the matters contained in the government order, recommendation, or guideline. A presumption exists that any such government order, recommendation, or guideline is not admissible as evidence that a duty of care, a new cause of action, or a substantive legal right has been established.

Class Action Protection

Even if the immunity described in the Amended House Bill does not apply, no class action may be brought against any person, place or business alleging liability for damages for injury, death, or loss to person or property on a cause of action specified in that division.

General Assembly Findings

The legislation was deemed necessary due in large part to the fact that many Ohio business owners, small and large, have begun to re-open their business and are unsure of what their tort liability may be. Further, the General Assembly found that businesses and premises owners have not historically been required to keep members of the public from being exposed to airborne viruses, bacteria, and germs. In Ohio, it has been the responsibility of individuals going into public places to avoid exposure to individuals who are sick. The same is true today: those individuals who decide to go out into public places are responsible to take those steps they feel are necessary to avoid exposure to COVID-19, such as social distancing and wearing masks.

Importantly, this legislation does not replace employment related issues which might otherwise be governed by the Families First Coronavirus Response Act, including paid sick leave, nor does it override Ohio’s workers compensation laws.

The post Governor Mike DeWine Signs Amended House Bill 606 appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

The relief for Ohio income tax filings, however, has not been granted for sales and use taxes. The Ohio Department of Taxation issued a reminder indicating that the March 2020 monthly sales and use tax returns, and first quarter 2020 use tax returns, are due by April 23, 2020. Taxpayers must maintain compliance with this deadline.

As certain tax filings and tax payment deadlines are extended by both the federal and state governments responding to the Covid-19 pandemic, it can be both overwhelming and confusing. Please contact any of our tax attorneys to discuss compliance and opportunities available to you and your business. Also, keep watching our website for important updates as the tax compliance landscape continues to change. Our attorneys are here to help and to serve our clients and communities during these uncertain times.

The post Ohio Sales and Use Tax Deadline Approaching appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

Through a diminished value claim a vehicle owner is able to recoup the damage to the value of the car itself when the collision damage and repair are noted on CarFax. The measure of damage for this claim is the market value of the vehicle right before the collision as compared to the market value after the vehicle has been repaired.

Experts in such valuation exist within the car industry and can provide written opinions concerning these two values and the devaluation your vehicle has experienced due to the collision. Unfortunately, most people are unaware of the reduced value caused to their car until they go to trade it in on a new car, or attempt to sell it on their own. Car purchasers and dealers are likely to obtain a CarFax report which tracks the service and repair history of your vehicle in a national computerized database by Vehicle Identification Number (VIN). Depending on the degree of damage sustained by your car in a prior collision (and even if the car has been properly repaired) the value of your vehicle may well have markedly dropped from thousands of dollars to tens of thousands of dollars. The noted prior damage may also result in dealerships not desiring to take your car in trade on terms agreeable to you, and could well result in a private purchaser walking away from a sale since they simply do not want to purchase a vehicle which has been in a collision.

The largest diminished value claims involve exotic cars, rare cars with extremely low miles, and cars with the most significant damage which are not deemed a total loss. Diminished value claims do not exist where the vehicle has been determined to be a total loss, or to leased vehicles where you are not the titled owner.

In order to present a claim for diminished value you will need to document:

• Purchase price of your vehicle
• Geographic location, mileage at time of the loss
• Whether the vehicle was towed from the scene or able to be driven away
• The final estimate for repair evidencing amount of damage
• Date of loss
• Prior or subsequent damage and repair
• Written opinion of a knowledgeable used car salesman or insurance appraiser as to the difference between the value of your vehicle undamaged as compared to damage sustained on date of loss

Under the law of Ohio, you generally have two years from the date of the collision under the Statute of Limitations by which you must resolve the claim or be forever barred (unless you file a lawsuit). In order to present a diminished value claim to the at-fault party’s insurance company, you need to advise them of your desire to do so. Also, ask them what, if any, evidence they uniquely require to process such a claim. All insurance company claim requirements are unique and you will want to make best efforts to comply with the requested information they seek from you.

Should the at-fault driver not have insurance, or have an inadequate amount of insurance compared to the damage claimed by you, you will need to look at your own auto insurance coverage in order to assess whether you have uninsured or underinsured property damage coverage that will apply. Unlike suit against the at-fault party being governed by Ohio’s tort statute of limitations of two years, an uninsured or underinsured contract claim against your own carrier will be governed by the time period you must file your claim in court set forth in the contract. Usually the contracts limit these claims to two years. If the contract is silent as to this issue, Ohio’s contractual statute of limitation will apply. Currently a written contract breach must be filed in Ohio within eight years of the breach.

The next time you, your family member, a friend or a co-worker sustains property damage to their vehicle in an accident where they were not the person at-fault, you may well wish to pass on to them this valuable information. In addition to property damage repair, an award from this additional claim can put you back in the position you were in, as it relates to the value of your vehicle.

The post What’s My Car Worth After an Accident? appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

Beginning October 1, 2020, Ohio will be one of 41 states introducing a new driver’s license and state identification card that is compliant with federal regulations and ensures better security and identification protection for U.S. residents. The compliant identification card has a star in the upper right-hand corner and will be necessary to clear airport security or enter a federal building, including military bases. An Ohio driver’s license issued prior to July 2, 2018 may not be federally compliant, and thus, will not be accepted by the Transportation Safety Administration or security checkpoints at federal buildings. It should be noted that a valid U.S. passport will remain a federally compliant means of accessing flights and federal buildings after the October 1, 2020 effective date.

How to Get A Compliant ID Card in Ohio

In order to be granted the federally compliant ID, you will now have to bring several documents with you to the BMV so that your identity can be verified.  You will need all of the following:

1. Birth certificate or US Passport/Passport card, and
2. Social Security Card or most recent W-2 or 1099 showing your social security number, and
3. Two proofs of Ohio address (bank statement, utility bill, credit card statement), and
4. Marriage license or divorce decree to show any legal name changes.

Further, you will no longer be given the new identification card at the BMV. Your new card will come to you in the mail. The BMV will issue you a temporary card until your compliant card arrives. For those who do not have a need for a federally compliant card, there is still the option to receive a standard driver’s license or identification card. The standard ID card does not require the additional documentation outlined above.  

It is important to note that the new identification will also be necessary to enter federal buildings. Offices such as the IRS, Social Security, Veteran’s Administration, Department of Labor, and US District Courts are located in federal buildings.  

All identification cards continue to be valid for 4 years and require a new photograph with every renewal. You also will continue to need a passport to travel outside the United States.

Do not be turned away for failure to have the proper identification. Plan to get the new star card or have your U.S. Passport with you.

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