Month: May 2019

On January 1, 2019, DC’s new tax-exempt renewal rules went into effect.  Under these new rules, non-profits who have received tax-exempt status from DC are required to reapply for tax exemption every five (5) years.  Many DC non-profits have already received a “Notice of Upcoming Exemption Expiration” from the DC Office of Tax and Revenue (the “OTR”) informing them of this requirement. In order to renew its tax-exempt status, a non-profit must log into its MyTax.DC.com account and complete the online FR-164 tax exemption application.  If a non-profit does not renew its tax-exempt exemption it will be reclassified as a fully taxable entity in DC.  These new rules affect any non-profit doing business in the District.

One of the most vexing parts of this new renewal process has been obtaining an affirmation letter from the IRS.  In order to renew its tax exemption, a non-profit that had a determination letter issued over four (4) years ago was required to obtain an affirmation letter from the IRS confirming its tax-exempt status. 

However, earlier this month it was announced that DC would no longer require IRS affirmation letters.  Instead, the OTR will confirm a non-profit’s IRS tax-exempt status by performing a Publication 78 data search on the IRS website.  While the FR-164 exemption application will still have a section where a non-profit can submit its affirmation letter, it is no longer a required field in the application.  This change should streamline the renewal process and make it significantly easier for non-profits to complete the renewal application.

If you have any questions regarding the new DC tax-exempt renewal rules or the FR-164 tax exemption application, please contact Katie Meyer at kmeyer@gkglaw.com.

Update:  GKG Law's Tom Wilcox will testify on behalf of the National Grain and Feed Association at the Surface Transportation Board's oversight hearing on railroad demurrage and accessorial charges on May 22 in Washington, DC.

The Surface Transportation Board (STB) has scheduled a public oversight hearing on May 22, 2019, to receive information from railroads, shippers, receivers, third-party logistics providers, and other parties about their recent experiences with demurrage and accessorial charges.  The STB’s announcement stated that the hearing arises from “recent concerns by users of the freight rail network and other stakeholders about changes to demurrage and accessorial tariffs being implemented by various Class I carriers, and follows related letter inquiries to Class I carriers, including requests for information on quarterly revenue from demurrage and accessorial charges for 2018 and 2019.”  Matters of concern include reciprocity, commercial fairness, the impact of operational changes on such charges, capacity issues, and effects on network fluidity.

GKG Law’s Tom Wilcox recently addressed this issue at the National Coal Transportation Association’s Spring Conference on April 2, 2019.  Tom advised conference attendees that non-railroad parties have several options in addition to attending and listening to the hearing, which include providing in-person testimony, submitting written comments, or both.

The full Decision Information from the STB can be read here.

Detailed hearing schedule here. 

Deadlines are as follows:

• If you would like to testify, you must file with the STB preferable as soon as possible, but no later than April 24.
• If you want to participate in person.  Written testimony must be received by May 8.
• If you simply want to only submit comments, they must be received by May 8.

For more information on this issue and hearing, please contact Tom Wilcox at twilcox@gkglaw.com.

Two years ago, on behalf of the National Customs Brokers and Forwarders Association of America (the NCBFAA), GKG Law worked with the US Coast Guard (USCG) to challenge the attempts of the ocean carriers that would have required NVOCCs and shippers to provide a Verified Gross Mass (VGM) Certificate to the carriers in advance of tendering cargo. As you may recall, the VGM issue arose due to efforts by the International Maritime Organization (IMO), after several vessels capsized for unknown reasons, to adopt a method that would provide greater certainty about the weight of containers being loaded on vessels.

After a number of meetings on the topic, the IMO issued what are called VGM Guidelines which were adopted by most trading nations. The VGM Guidelines take the position that it is the shipper’s responsibility to verify the weight of loaded containers and require any party tendering cargo to provide a VGM certificate that has been obtained from a certified scale in advance of the tender. However, we contended that turning what had been Guidelines into mandated regulations amounted to an inappropriate attempt by the vessel operators to transfer significant operational burdens and liability to NVOCCs and shippers. Moreover, as US ports already had certified scales and were fully capable of weighing containers before or during the loading process, this would essentially be a redundant process that drove up costs unnecessarily.

Despite significant lobbying efforts in the United States, the carriers were not successful in getting the USCG – – which has jurisdiction over maritime safety issues – – to adopt the VGM Guidelines. Instead, the USCG was persuaded that the carrier’s attempts to make this a requirement in the US, regardless of what other nations decided, were unnecessary and inappropriate.

Consequently, the USCG declined to make the VGM Guidelines a requirement and the carriers’ attempts to circumvent this decision by putting VGM rules in their tariffs were met with disfavor by the FMC.

Nonetheless, we have heard recently indicating that some carriers may be requiring NVOCCs to provide VGM Certificates as a condition to accepting cargo and is seeking information on the topic. If your company is being required to provide the VGM Certificates to the vessel operators, we would be interested in knowing about it and suggest that you provide us with the names of the carriers that have imposed this requirement.

If you have any questions, do not hesitate to contact Ed Greenberg at 202.342.5277 or egreenberg@gkglaw.com.