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Accepting A Check For Less Than You're Owed - Can You Collect More
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    Your subscriber falls behind several months and you accelerate the balance of the contract, sending the subscriber a bill for the full amount.  You also cancel service and the relationship is clearly over.  Then you get a check for the months that were in arrears with the notation that it's "payment in full".  You deposit it.  Can you continue to pursue the subscriber for the balance of the contract?  What if you write "accepted without prejudice to collect balance owed" or "under protest"? 
     The answer is a lot more complicated than you might think.  But here's the gist of it.  If you accept the check marked payment in full then you will be deemed to have accepted that check in full satisfaction of the debt.  It won't matter if you write "without prejudice" or anything else.  If you give the money back within 90 days then the original debt will be reinstated.  This general rule applies in 48 states; it does not apply in New York.  In New York if you deposit the check "under protest" or some other limiting notation you will not be deemed to have accepted the lesser amount you think is owed.  The law in Oregon is not clear.
      Negotiating a check marked "paid in full" is deemed "an accord and satisfaction" of the debt, and as noted above, only New York permits a reservation to preserve the full debt.
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QUESTION: TAXES
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Ken,
    My company is planning on expanding into the alarm installation and monitoring business and private guard response business in Florida.  I was told that the tax requirements for alarm companies in Florida are difficult to understand and more burdensome than the tax requirements in most other states.  Can you describe the Florida taxes I will likely have to pay once I start doing business there?
Thanks,
Anon
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RESPONSE
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    I’m not a tax expert and suggest you consult an accountant or tax attorney to discuss all the tax requirements your company may be subject to.  Mitch Reitman [listed in The Alarm Exchange] is usually a good bet for this advice.  I turned this over to one of our staff attorneys; here's his response:
    As far as complying with Florida tax law, the first thing you need to do is register with the Florida Department of Revenue.  In Florida, alarm companies are subject to a 6% sales and use tax for the sale of goods and/or services.  The sales tax is applied to all sales of goods and/or services while the use tax is applied to any transaction that is subject to the sales tax but for one reason or another the sales tax was never paid.  Any services you provide in Florida will be taxed on the price charged for the services, however, you cannot deduct the expenses incurred in performing those services.  For example, let’s say you provide private guard response for $10,000 a year, pay $8,000 in wages to several security guards, and pay $1,500 in Social Security taxes on those wages.  The taxable amount of these services is $10,000, since the $8,000 in wages and $1,500 in taxes can't be deducted, making the sales tax $600 (6% of $10,000).  On top of that, any transaction that is subject to the sales and use tax is also subject to a discretionary sales surtax.  Unlike the sales and use tax, the discretionary sales surtax is a county tax and the rate typically ranges between 0.5% and 1.5%.  Some counties don’t impose any surtax which is why it is important to know which regulations apply to your company.
            Unless you want to pay these taxes yourself you need to pass these taxes on to the customer when sending out your bills.  That means your bill must include: (1) the price for your services, (2) the 6% sales tax, and (3) the discretionary sales tax.  There are many exemptions to the tax rules so before expanding into Florida you need to consult a tax expert to determine whether your company falls under any exemptions to the rule.  This article deals only with Florida tax law because that was the question, but a full analysis of all regulations your company must comply with would also focus on licensing, contract and employment regulations, as well as other local regulations that your company is subject to.  For compliance with tax regulations, I suggest you play it safe and take the time to consult a tax attorney and/or accountant.  For assistance with licensing, contracts, and employment requirements in the states your company operates contact Jesse Kirschenbaum, Esq. at (516) 747-6700 ext. 307 or at Jesse@Kirschenbaumesq.com. 
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