Archive for Contractors

NY Filing Requirements for Highway Use Tax

ny-hut-highway-use-taxNew York State imposes a highway use tax (HUT) on motor carriers operating certain motor vehicles on New York State public highways (excluding toll-paid portions of the New York State Thruway). The tax rate is based on the weight of the motor vehicle and the method that you choose to report the tax.

If you have been issued a certificate of registration ( except a highway use tax trip certificate of registration), you must file a highway use tax return even if no tax is due, or even if another person will pay any tax due on the use of the vehicle operated under the certificate of registration.
There are two ways to file:
Web File: You may Web File your highway use tax return.
File by mail: You may file a paper tax return using Form MT-903, Highway Use Tax Return.

When to file and pay:

Quarterly – You must file a highway use tax return and make payment of tax due each quarter, starting with the calendar quarter when you began operations in New York State.

The periods and due dates for quarterly filing are:

Reporting quarter                       Due date
January through March                 April 30
April through June                         July 31
July through September                October 31
October through December           January 31 (following year)
Monthly – After filing quarterly in the first year, you will be reclassified by the Tax Department to a monthly filer if your preceding calendar year’s total highway use tax is more than $4,000. You must begin filing monthly highway use tax returns for the January reporting period. Returns are due by the last day of the month following each reporting period.

Requesting change of filing period

If your preceding calendar year’s total highway use tax liability is $4,000 or less, and you were subject to the highway use tax during the entire year, you may request permission to file quarterly.

If your preceding calendar year’s total highway use tax liability is $250 or less, and you were subject to the highway use tax during the entire year, you may request permission to file once a year.

Submit your request and taxpayer identification number to:
NYS Tax Department
Miscellaneous Tax – Highway Use Tax
W A Harriman Campus
Albany NY 12227

Always consult your tax professional before filing any returns..

Contact us to schedule an appointment and take the guess work out of filing.

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Surety Bonds – What Are They, How Do They Work and Where Do You Get One

 When you deal with construction, either as a general contractor, sub-contractor as a project owner, you may eventually encounter the need for a surety bond. Regardless of where your interests lie in the project, you need to understand the mechanics of surety bonds to understand your options.

What is a surety bond: A surety bond is a promise to pay one party (the obligee) a certain amount if a second party (the principal) fails to meet some obligation, such as fulfilling the terms of a contract. The surety bond protects the obligee against losses resulting from the principal’s failure to meet the obligation. A surety bond is a contract among at least three parties:

  • The obligee – the party who is the recipient of an obligation,
  • The principal – the primary party who will be performing the contractual obligation,
  • The surety – who assures the obligee that the principal can perform the task

Commercial and Contract Surety Bonds / Contract(Construction Bonds) Bid Bond:   Required with the Bid Proposal, Bid Bonds guarantee to the owner that you will enter into a contract and provide the required Performance and Payment Bonds if the job is awarded to you.

  • Performance Bonds:  Guarantee that you will complete the contract in accordance to the contract terms for the amount agreed upon and in the time specified.
  • Payment Bonds:  Guarantee that your suppliers, sub-contractors and labor force are paid.
  • Maintenance Bonds:  Guarantee the maintenance on the work performed. These bonds are usually run for one or two years after the bond contract is complete.

Commercial Bonds 

  • License/Permit Bond:   When one has been granted a license to engage in a particular business or a permit to exercise a particular privilege upon condition that they post a bond with the agency granting the license or permit
  • Judicial Bonds are separated into two categories: ERISA Bonds:   Required to protect the participants and beneficiaries from dishonest acts of a fiduciary who handles the plans assets. ERISA requires every plan to bond any fiduciary and all other persons who handle plan assets.
    • Court Bonds – Required in a judicial proceeding where a litigant, in advance of a final decision by the court on the merits of his claim, is allowed the remedy sort in their suit upon the condition that he files a bond.
    • Fiduciary Bonds – Required when one has been appointed to a position of trust to be administered under the jurisdiction of a court, such as an Executor, Administrator, Guardian, Trustee or Receiver
  • Public Official Bonds:   Required by state, county and municipal officers who are required by law to post a bond for the faithful performance of their duties.

Who do I get a surety bond from?   You want to find an agent experienced in and preferably one that specializes in surety bonds for your industry. Agents that work in surety bonds are required to have an insurance P&C License.  

Before you agree to provide a surety bond, be aware that not everyone qualifies for bonding. What Do I Need To Apply For A Surety Bond?

Initial Information Requirements To Maximize Bonding Credit

  1. Last Three Fiscal Year End Financial Statements (F/S) prepared by a CPA on either a Review of a Fully-Audited Basis. These F/S must be prepared on the Cost-to-Cost Percentage of Completion Method of Accounting with the appropriate Contracts-in-Progress and Completed Contracts schedules;
  2. Six-Month Interim F/S, if the current Fiscal Year End F/S is more than six months old;
  3. Aging Schedule of Accounts Receivable as of the most current F/S date with Subsequent Collections Noted (if not already included in the F/S);
  4. Most Current Corporate Tax Return;
  5. Most Current Financial Statement and/or Tax Return on Affiliated/Related Party Entities;
  6. Personal F/S on all Stockholders/Spouses as of the most current Corporate Fiscal Year End Date. Documentation of personal liquid assets and schedules of rental/investment real estate owned documenting the cash flow of the properties MAY be needed;
  7. Most Current Individual Tax Return on all Stockholders;
  8. Current Schedule of Contracts in Progress;
  9. Fully Completed Contractor Questionnaire;  for LLCs, please provide a copy of the Operating Agreement
  10. Current Letter from the Firm’s Bank(s) Outlining; Average and Current Balance, Line of Credit, Terms and Conditions of the Line of Credit, Amount Outstanding Against the Line of Credit, General Comments including the Length of theRelationship
  11. Resumes on all Stockholders and Key Employees;
  12. Current Certificates of Insurance;
  13. Bond Request form, Copy of the Contract, etc. (if applicable)
  14. If available
  •  Supplier Reference Letters and Projects Reference Letters, preferably on the largest completed projects;
  • Business Continuity Plan (such as Buy-Sell Agreement or Life Insurance naming the Firm as Beneficiary).    

Bond requirements may vary depending on the state you are in, so please check with your surety bond agent for further details. Visit the website of  NASBP (National Association of Surety Bond Producers)for additional information.
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Making Your Construction Business More Profitable

10152641_573081996138421_5796564990161265784_n (3)Small companies are always struggling to find more profits with less time and resources.  Construction and architectural companies are faced with these same struggles, but they often have the additional challenges of high equipment costs and the competition of bidding on jobs against a tight pool of opponents. Trying to maintain a tight leash on costs while growing the business and staying competitive can be a daunting task. There are a few small business areas where additional attention now can mean more profitability in the long run.

Understanding of your company’s overhead- Look at all those expenses that you would still have to pay if no one worked for a week, like rent, utilities, equipment loans, salaries, web site, internet and other costs. Once you have a firm grasp on your fixed costs, it will be easier to bid on jobs and more importantly, make a profit from the jobs you win.

Accounting on and off the job site- Trying to juggle your small business accounting on napkins and post-its from the field or an antiquated accounting system can cost your business thousands or even tens of thousands in lost time and missed revenue.  Invest in a productive and efficient small business accounting software program like QuickBooks. Consult with a small business accountant about the best way to set up your accounts and how to generate reports.  You’ll need to access this data time and time again, so an investment in solid advice at the start will enable you to do the job right the first time. After you have a good accounting practice in place, you’ll be far better prepared to process invoices in a timely manner. Better accounts receivable means better cash flow.

Change Orders- Sustaining a tight control on client’s change orders can be the difference between being profitable or not. Change orders are those requests that fall outside the scope of your original contract and can add up to hours of re-estimating work and lost time if you’re not careful.  Failure to keep up with change orders can also mean that your business is losing considerable dollars and opportunities for profitability because you’re doing work that you’re not being paid for. Change orders serve as an excellent source of increased revenue, too.  Because you already have the original contract, you don’t need to compete with other construction firms to win the business – you’ve already got that! Put a tracking system in place to organize, manage and complete change orders in the field and translate those modifications into actual billable time on the accounting side. Which takes us to the next step – accounting.

Job Analysis- Having a good estimating and accounting system will also save you the repetition of freshly estimating every job.  In construction as in many other businesses, there are similarities from job to job.  Having an electronic reference will equip you with a track record from which you can gauge the profitability of your pricing structure including the raw materials and labor required for each job. When you take the opportunity to reflect on previous projects, it will enlighten you to the success of the job, stumbling blocks and enable you to learn from mistakes so you can be more profitable with future contracts.

Training- This portion of your small business management translates into many aspects of your business.  Invest in your staff by providing growth and enrichment opportunities. This benefits both the employees and your company, resulting in employees who are more loyal, resulting in less turn over.  Absence of employee retention can wreak havoc in a small business, especially when those individuals in strategic positions leave the company. The cost to search for and hire replacements can impact your company both financially and emotionally as the strain of double-duty roles on the remaining employees can be exhausting. By providing in-house training on responsibilities, roles, safety and procedures, you will have a more efficiently operating organization. Set aside time to draft procedures and maintain them will streamline repeated questions, curtail errors and in the case of safety, can prevent costly and serious injuries on the job site. Procedures aren’t etched in stone but they should be documented, reviewed by your team and then revisited regularly.  As procedures change, they should be revised with a journal log so you can see who updated the procedure, what changes were made and why.

A business is a business, but each type of industry has different obstacles where the company can become stuck if the right reinforcements aren’t in place. Construction firms have unique needs; speak with an experienced small business advisor in your area to learn how you can become more profitable.

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