Announcements

Commercial Activity Tax (CAT)

The biennial budget passed this past summer phases out the tax on tangible personal property over four years, and the corporation franchise tax over five years. It also reduces all personal income tax rates by 21% over five years. Various excise taxes are increased and the 10% rollback on real estate taxes for most commercial and industrial property is eliminated.

However, the centerpiece of the plan is a commercial activity tax ("CAT"). The CAT is essentially a tax on gross receipts from commercial activities. It is imposed at a rate of 2.6 mills (.0026) on the taxable gross receipts of virtually all commercial activity in Ohio

Taxpayers with annual gross receipts in excess of $150,000 are required to register by November 15, 2005 or face a penalty of $100/month. If you haven't grossed over $150,000 previously but happen to in the future, you have 30 days to register. Fee is $15 for electronic and $20 for paper registration. This is a one-time fee (i.e. there is no annual renewal fee.)

The start date for the CAT is July 1, 2005. The first return is for a semiannual period (July 1, 2005 to December 31, 2005) for both annual and quarterly taxpayers and is due February 10, 2006.

Electronic registration is available online through the Ohio Business Gateway at obg.ohio.gov or through our web site at tax.ohio.gov (click on the CAT logo). Paper registration forms can be downloaded at tax.ohio.gov (click on the CAT logo) or requested by calling 1-800-282-1782.

If you have questions about the CAT, contact the Ohio Department of Taxation at 1-888-722-8829 or www.tax.ohio.gov (click on "Contact Us" to email your question).

CBR Election

On November 8, CBR members will be mailed a ballot to cast their vote for one new Affilaite Director and four new REALTOR® Directors who will begin their term on January 1, 2006. Following are the candidates who will appear on your ballot:

REALTOR® Director Candidates

Terry Bryant, Coldwell Banker King Thompson
Chuck Johnson, Carey Falor Realty Partners
Sara Walsh, HER Real Living
Gloria Cannon, Coldwell Banker King Thompson
Gary Francis, American Dream Realty
Bob McCarthy, HER Real Living
John Myers, Jr., Myers Real Estate
Bonnie Nyikes, RE/MAX Premier Choice

Affiliate Director Candidates

David Dikeman, Homestead Mortgage Company
Kim McCutchen, ValMer Land Title Agency, LLC

Your ballot must be returned in the envelope provided.

Only one ballot per envelope will be accepted. Ballots can be mailed or dropped off at the CBR. Deadline to return your ballot is Noon on Friday, November 18, 2005.

Professional Standards - Duty to Arbitrate Upheld

A New York court considered whether REALTORS® must arbitrate their commission disputes, even if they are members of two different associations.

Norma Reynolds Realty, Inc. ("Reynolds") is a member of the Long Island Board of REALTORS® ("LIBOR"). Brown Harris Stevens Westhampton, LLC ("Brown Harris") is a member of the Hamptons & North Fork REALTORS® Association, Inc. ("HNFA"). The two associations had entered into a "Cooperative Enforcement Agreement", which specified the procedural requirements the associations would use if a dispute arose between members of the two associations.

The two brokerage firms had a dispute over who was entitled to a commission from a transaction involving property owned by Adam and Peggy Young ("Owners"). Brown Harris submitted a request to arbitrate the commission dispute with LIBOR. Reynolds rejected this request, and instead filed a lawsuit against Brown Harris and the Owners.

The Owners were holding the commission in escrow, pending the resolution of the commission dispute. Both parties filed motions with the trial court, Brown Harris seeking to compel arbitration and Reynolds seeking an order to stay the arbitration pending resolution of the lawsuit.

The Supreme Court, State of New York, Suffolk County, entered an order compelling arbitration and staying the lawsuit. Reynolds argued that she never agreed to arbitrate disputes with Brown Harris. However, the court determined that Reynolds had agreed to arbitrate contractual disputes with other REALTORS®, pursuant to Article 17 of NAR's Code of Ethics, regardless of what association or board to which the other REALTOR® belongs. Thus, the court entered an order compelling arbitration of this dispute and stayed the lawsuit.