Legal Briefs: News From Around NH

A federal appeals court in Alabama has ruled in favor of 13 states – including New Hampshire — that challenged a ban by the federal government over using federal grants for tax cuts.

The states argued that the ban was unconstitutional and the court agreed unanimously.

The case involves the American Rescue Plan Act, passed in March 2021k which gave states more than $200 billion in grants during the Covid-19 pandemic.

The aid bill included a provision that no state could use those dollars to cut taxes or delay a state tax increase. It gave the U.S. Treasury Department the authority to recoup from states any state tax cuts made possible by ARPA money.

At the time, New Hampshire was receiving the ARPA grants, the state cut taxes in the budget, including cuts in the rates of the business enterprise and business profits taxes as well a five-year phaseout of the state’s 5% tax on stock dividends and bank account interest.

Chimney services contractor pays $26k in retaliation case

Manchester chimney services contractor Ceaser Chimney Service Inc. has paid a total of $26,163 to three workers in order to resolve allegations that it violated the Fair Labor Standards Act’s anti-retaliation provisions.

The charges were brought after investigators in the U.S. Department of Labor’s Wage and Hour Division Ceaser Chimney Service fired an employee in June 2021 after they contacted the NH Department of Labor to inquire about their rights under the labor laws. The employer also unlawfully questioned two other employees regarding their communications with the Wage and Hour Division during its investigation.

“The U.S. Department of Labor takes allegations of employee retaliation very seriously,” said Wage and Hour Division District Director Steven McKinney in Manchester. “These rights include the ability to contact the department and other agencies about the employer’s pay practices and to speak openly with investigators and other department officials during an investigation.”

Judge awards ValleyNet $3 million in compensatory damages

A Vermont Superior Court judge has ordered ECFiber operator ValleyNet to be paid a total of nearly $2 million in damages stemming from losses it suffered in the embezzlement of the company’s coffers, although how much of that sum — including the actual amount of money taken from the company — ValleyNet will be able to recover remains unclear.

The Valley News reported that Judge Timothy Tomasi said the embezzled funds would have allowed ValleyNet “to build out their network in an improved way, it would have allowed them to reduce the amount they borrowed, to lower rates to customers and citizens and to provide more services for customers.”

ValleyNet operates the ECFiber fiber network, which provides broadband internet to under-served towns in New Hampshire and Vermont.

The financial damages award is expected to be collected from the proceeds in the sales of real estate properties and other assets owned by John Van Vught, an accountant who worked under contract for ValleyNet and whose embezzlement was discovered after he left the employ of the ValleyNet in 2022 and a new accountant noticed discrepancies in the company’s books.

IRS releases claim to DiLuzio Ambulance Service assets

The Internal Revenue Service has released its claim on assets of DiLuzio Ambulance Service as the Keene company works to clear up its tax-related problems.

Earlier this month, the IRS sent a letter to DiLuzio clients instructing them to send payments to the federal agency, instead of DiLuzio, in order to clear up the company’s $648,965 tax debt. But last Friday, the IRS sent a second letter to these same clients, saying it had released its “levy,” or the action allowing it to seize company property, including client payments.

Neither the IRS nor the company provided specifics, but DiLuzio said in a written statement The Keene Sentinel that the tax issue would not disrupt business and that the company “has hired tax professionals to work with the IRS for the purposes of addressing and resolving its IRS Tax Problems.”