Cliff's Notes

The Business of Dentistry

Class Action Liability Risks for Violations of ADA and New York Human Rights Laws

In January 2018, the federal government conformed its website accessibility requirements to the Web Content Accessibility Guidelines (WCAG), an international set of standards intended to make web content more accessible to users with perceptual or physical challenges. The WCAG addresses low vision, color perception, cognition, manual dexterity, screen reading technology, and other issues related to user abilities. The Department of Justice (DOJ) promised to do the same in the private sector by mid-year, but that initiative has been deferred.

As a consequence, there has been a surge of class action lawsuits alleging Americans with Disabilities Act (ADA) violations based on access to website information that the Courts have been addressing individually. The first federal court decision that a website violated the ADA was in early 2017. The decision was followed by 800 federal lawsuits that year alone, alleging ADA as well as state law civil rights violations. (New York led the way with more cases than any other state). Until a clear standard is set by Congress or the appropriate regulatory agency, web site ADA lawsuits will continue to increase.

The ADA prohibits discrimination on the basis of a disability “in places of public accommodations”.  As such, any business is potentially an ADA class action target. Class actions require only one named plaintiff (who brings suit individually and on behalf of those “similarly situated”), and one defendant (potentially, you). Whether you are a large or small business, brick and mortar, or web-based only, defending an ADA/Human Rights Law class action promises to be costly in two ways. Not only is there the risk of a potential damage award, the ADA is a “fee shifting statute.” As a result, a defendant must pay its own legal costs to defend the action and may be required to pay those of a successful plaintiff as well. These costs alone may run into the tens or hundreds of thousands of dollars.

Now, with the website accessibility lawsuit floodgate open, it imperative for businesses to ensure ADA compliance. The easiest and most economical approach is a website compliance audit and action-item checklist conducted by legal counsel experienced in ADA website accessibility issues. For instance, does your website include:

  • Visual Alternatives (pre-recorded text for audio, descriptors for images)
  • Sound alternatives (text descriptors for audio)
  • Color Contrasting (that meet the minimum ratios)
  • Key board navigation (i.e. function and/or tab key, not mouse-only options)
  • Adjustable font size (without content or acuity loss)
  • Semantic HTML (descriptive headings that identify the content that follows)

Many of these features are easy (and inexpensive) to implement once you (and your website consultant) know what is required.

This article was published by the Mandelbaum Salsbug, www.lawfirm.ms, Cyber Security Team.

Cyber security directly effects your HIPPA management program. Are you secure? Please feel to contact me at anytime with questions or concerns.

 

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July 8, 2018 Posted by | Uncategorized | Leave a comment

The Change in State Sales Tax Law

“The U.S. Supreme Court, in a landmark 5-4 ruling, basically gave states the green light to have online retailers collect sales tax, just like any local retailer. The message of that decision for e-commerce players? They’ve grown so big that they can’t get any special breaks anymore, at least when it comes to collecting sales tax, regardless of whether they have any physical presence in a state”. … Forbes https://www.forbes.com/sites/andriacheng/2018/06/22/what-supreme-courts-internet-sales-tax-ruling-says-about-the-state-of-retail/#29618c791e9c

State sales tax laws are regulated by the individual states. In New York, the county governments add their piece What items are taxable are also decided by the states and it varies quite a bit. For example in my state, New Jersey, 35%-40% of dental clinical materials used are taxable, in New York it’s 95%. There is no published list, just an overall consumer tax concept so it is left to the discretion and interpretation of the state tax auditor.

State Tax Auditors … New Jersey just settled a state budget fight, the issue was what taxes to raise. The state also plans on more random audits of business to collect unreported USE tax. In healthcare, the auditor is not going to break down taxable and non-taxable items and out of state vendors will resist the obligation to collect tax. However, when requested, they will have to submit sales reports to any state that requests it.

The State Request … I strongly suggest that at the next quarterly meeting you have with your tax advisor you discuss your ability to provide information requested by the state should you be chosen to be audited. You will be asked to produce 3-5 years of invoices both payables and receivables, tax returns, bank statements, employment records, and schedule an on-sight visit. It’s not fun and you can’t win so be prepared. States are preparing to cash in on internet sales.

Internet Sales … Not all internet sellers will collect sales tax and it will be nearly impossible for a state to track internet sales directly from small vendors so audits will continue. On-line sellers eBay, Amazon, Wayfair, and others with a large web presence will turn over sales through their organizations when a state’s sales tax is not collected. The state will use technology and artificial intelligence to assimilate the data and send bills with interest and penalties. Repeated state billing will raise red flags and initiate a physical audit. Some of this scenario is personal speculation, but can you argue with it? States need revenue and with today’s technology, sales tax is low hanging fruit. There is an old saying “if you want to play, be prepared to pay”.

Play & Pay … You don’t want to be audited, it is an experience that could change your life. When you get that first letter asking you to contact (Mr./Ms.) from the State Division of Taxation you know you already lost. You will need to supply everything within 30 days and when you do, you will be asked for more or missing documentation. Every area of your dental practice will be examined and unfortunately nothing is perfect. If you cannot provide accurate information you will be penalized. Ask me, I know first hand.

Being prepared … I recently was asked to reproduce 3 years of invoices for a client that was under audit. The office was as clean an organized as possible but between accounting fees, USE tax violations, interest and penalties the bill was about $9k. The best way to avoid an audit is not to raise red flags. No one charges tax, we just collect it. Keep your business relationships only with organizations that recognize and participate in your state’s laws and regulations.

The Argument … I experienced a business state tax audit and the auditor was on-site for 4 days. There was an hour argument over “retraction cord” if it was taxable or not! We won that one but they did find a $17.00 error that cost us $2500.00. Do it right and you will minimize the damage. Be prepared! Consult with your tax advisor today and please feel free to contact me at any time with any questions or concerns.

July 1, 2018 Posted by | Uncategorized | Leave a comment