KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and whitelist ken@kirschenbaumesq.com ****************************** comment on Tax case with far reaching implications for the alarm industry September 17, 2026 ************************** comment on Tax case with far reaching implications for the alarm industry from article on September 4, 2026 ************************* Ken, Commenting on your September post about the Arizona Tax Cort case dealing with the taxability of computer server rack rentals. While the situation may be different than those encountered by an alarm co you were correct in explaining that all RMR is not necessarily monitoring. Those monthly payments that alarm companies bill and receive could be a myriad of services. Alarm companies should contract to perform them properly, and they should also recognize that, especially in a state that doesn’t tax alarm monitoring. States began catching on to the fact that some alarm companies sell systems for a low down payment and roll the rest of the system cost into the monthly monitoring charge. Texas was one of the first and overreacted by taxing each and every service that requires a Texas Alarm License. A lot of alarm companies find this out the hard way because their CPAs don’t realize that labor on CCTC and access control is taxable. Some states have realized that Software as a Service such Alarm.Com or Infrastructure as a Service (think supervised or cloud access control) are rentals of software or server space and many states tax this as well. It is critical to understand what your company does that is taxable. Just guessing will get you into trouble. Some states also take the position that if all, or part, of the services being invoiced for is taxable, then the entire invoice is taxable. If you don’t collect and remit tax from a customer on a taxable sale the state may require that your company pay it. Don’t go with the misconception that you can just “tax anything” as the states don’t like that either. The majority of business owners operate for decades without an IRS field audit. In most states there is almost a 100% chance that you will get a visit from a State Tax auditor every few years. The rules may be complex but the auditors know them. Losing a tax audit can be expensive. Don’t mess around. Mitch Reitman 817 698 9999 XT 101 Reitman Consulting Group Fort Worth, TX 76133 ******************************* Response ******************************* Take a moment to reflect. Do you have an accountant who you are confident knows how to properly handle your business accounting and tax obligations? The only right response would be "Yes". Anything less than that then you are entrusting your business to someone you already know you don't have confidence in. Engaging the property professional, whether it's accountant, lawyer or insurance broker [not to mention all the essential positions in your operation] isn't more expensive; it will be less expensive, will change your daily anxiety levels and reduce future surprises that can adversely affect you financially, perhaps to the point of ruin. If you're "stuck" with your professional then bring the right person on board to consult and to the extent permitted by Uncle Vinnie, guide. Clean up is far more expensive and aggregating than taking preventative measures and doing things right the first time. Mitch is a great resource to the industry and you should take advantage of his assistance. ***************************** STANDARD FORMS Alarm / Security / Fire and related Agreements. click here: www.alarmcontracts.com *************************** CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** ALARM ARTICLES: You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles updated daily ******************** THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily ************************* Wondering how much your alarm company is worth? Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth ****************************** Getting on our Email List / Email Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. You can read articles and order alarm contracts on our web site www.alarmcontracts.com ************************** Ken Kirschenbaum,Esq Kirschenbaum & Kirschenbaum PC Attorneys at Law 200 Garden City Plaza Garden City, NY 11530 516 747 6700 x 301 ken@kirschenbaumesq.com www.KirschenbaumEsq.com
