Update re: City of Miami Occupational License / Business Tax Receipt BTR for Paralegals
On July 3, 2012 I told you guys about this situation relating to the tax for paralegals from the City of Miami. You can see the original post here: https://miamifrp.com/occupational-licenses-or-business-tax-receipt-btr-for-paralegals-in-miami-and-ft-lauderdale/
Several people have responded and said that the tax only applies to independent paralegals who are working on their own providing services… If this DOES turn out to be true, the law firms who have been paying this tax since the beginning will likely be seeking some explanation and some refunds. Some large law firms ARE paying this tax and other law firms (including my own) have received notice that the tax needs to be paid. So, clearly this doesn’t only apply to independent paralegals.
You can actually see the meeting agenda/minutes/video of when this tax was applied. It wasn’t specific to paralegals, it looks like a large overhaul of the BTR list and paralegals were simply added along with many other professions. This is the history, from what I can tell:
File ID. 09-00991 to Amend Chapter 31 of the City of Miami Code. The amendment seeks to add enforcement procedure, update the category section and increase fees for all categories by five percent, among other things. It was proposed September 17, 2009 and adopted October 8, 2009 . You can see it on the October 8, 2009 Meeting Agenda, Page 13 (09-10-08_Meeting_Agenda) and you can read more in the October 8, 2009 Meeting Minutes, beginning on Page 23 (09-10-08_Verbatim_Minutes)
On July 12, 2012 I reached out to the City of Miami to get some clarification on this issue. The tax is included in City of Miami Code of Ordinances, Article II, Local Business Taxes Section 31-50 which requires an amount of tax to be paid for “paralegals” of $116.00. I advised them that I contacted the City of Miami’s Finance Department (305-416-1570) and was told that the BTR (Business Tax Receipt) is required for ALL paralegals who work within the City of Miami, but that others say they have been told otherwise and so we really needed clarification once and for all so that we are all on the same page.
A “legal services request” has been submitted to the City Attorney’s office in order to receive a “definitive answer” on this matter. As soon as I receive that, I will forward it to everyone.
Additionally, I feel that the issue of this tax isn’t cut and dry. I have submitted a list of questions for their consideration/response as well. As I see it, these are SOME of the issues:
- How is the tax applied – some paralegals who work at smaller firms may hold a different title but be doing some paralegal work. Also, some firms call their paralegals “legal assistants”, does the tax apply to “legal assistants” as well? If so, how do you differentiate between a firm who uses legal assistant for a paralegal versus for a secretary. If the tax does not apply to legal assistants, then to avoid the tax can’t firms simple re-title their paralegals to legal assistants?
- Who is responsible for paying the tax? Is the tax against the law firm hiring the paralegal or against the paralegal independently? Who is held responsible for not paying the tax? Since the tax is paid for a period of 1 year, if the law firm is responsible for paying, what happens when the paralegal leaves one firm and goes to another? What about paralegals working as temporary workers who may only be at each firm for a couple of weeks or months?
- If the law firm is responsible, how is it enforced? How does the city know how many paralegals are employed? Honor system?
- If a paralegal cannot provide services directly to the public, and can only work under an attorney who is required to have a BTR, why should a paralegal be required to have their own BTR? In this instance, how is a paralegal different from other legal staffers such as secretaries?
- Has anyone given any thought to the fact that forcing an employer to pay extra taxes for their staff could hurt firms which are already struggling financially? Attorneys would be more likely to hire “legal secretaries” and have them do the work paralegals would be typically doing to avoid paying the tax. Or, hiring paralegals but giving them alternative titles.
- Has anyone given any thought to the fact that it may cause confusion with the public regarding UPL issues when you have a paralegal who now has an occupational license or BTR? (I know of at least one paralegal who brags that they are “licensed by the City of Miami”)
I will keep you guys updated. Also, if your firm pays the tax or has received a notice regarding the tax, please let us know.
It seems to me that common sense would dictate that paralegals/legal assistants working in a firm under the direction and control of an attorney(s) would not have to pay the business tax (whether paid by the firm or the individual). If a paralegal had a stand-alone business, whether or not they worked for a firm, i.e., “Linda’s Top Notch Paralegal Services, Inc.,” then the business tax would be appropriate. I don’t see how (or who, for that matter), is going to keep track of the comings and goings of people, and who paid for what period of time, etc., as you enumerated above — that would be a nightmare!
I agree… I think self employed paralegals providing independent services… basically in business for themselves, freelance etc… OK then I can see it… (I like the company name lol)… but in this instance… I really don’t think its appropriate AND I plan to be very involved and hopefully do something about it… I think once I get the “official determination” from the City Attorneys office it will shed more light…
Another question I have, is why does the City of Miami charge a BTR of $45 per year for the firm and $70 per year for each attorney in the firm, while charging $116 for a BTR for paralegals. This is ridiculous and totally unfair.
I do not believe that paralegals, no matter what their titles are, should have to worry about paying a BTR, whether their firm pays for it or they pay for it.
Another excellent point Robin. Once I get the “official” legal determination from the City Attorney’s Office, I hope to get all of the other questions answered and hopefully will make some headway with this issue.
It sounds to me that whomever decided to include “paralegals” in this taxation plan does not have a proper understanding of the paralegal profession and the lack of direct regulation of paralegals through licensure, etc. Linda, you’ve asked some good questions, and I look forward to learning what response and information you receive. Please feel free to contact me if you’d like any assistance in communicating with and providing information to the City about this ill-devised plan.
Elona M. Jouben, MPS
“A Paralegal’s time and know-how are her stock-in-trade.”
I agree Elona, I got the impression that someone went to a career guide website and just ran their finger down the list of possible careers and included them all, this doesn’t have anything to do with targeting paralegals… I think they just added a bunch of new categories and didn’t give any thought to how paralegals might be handled differently. I’m now waiting to get the official determination from their attorney and hopefully some answers to the questions I’ve submitted before I take any further action.
Also, if when dealing with attorneys the firm pays one fee and then each attorney pays a lesser fee ($45 for firm then $70 for each additional attorney) why are paralegals paying $116? They should then be under the umbrella of the $45 firm tax like attorneys are.