The Americans With Disabilities Act: It''s Still a Good Thing for Most Laundry Owners

As the old year came to a close, many laundry operators began to examine their tax exposure for the year, and some panicked because they didn''t like the picture they saw. Those who didn''t plan carefully were facing substantial tax liabilities and wanted to consider equipment buying for tax benefits. But, if they did, shouldn''t they have looked at the benefits offered under the ADA law? Of course that would only be done after reviewing it with their tax advisors. Anyone considering the purchase of equipment as a tax option should ask their tax advisors about any savings they might be able to derive from purchases made to make their laundry more accessible under the Americans With Disabilities Act (ADA). This act was passed with the best of intentions. It was designed to eventually make all public places in the nation accessible to all -citizens, including those with handicaps. All public buildings and all new business structures, open to the public, must now be built and equipped to be accessible for handicapped persons. For new laundries, the principle impact of the law has been to reinforce already existing trends of using more front load washers and stacked dryers. Rising rents meant laundries had to install equipment that offered the potential of greater dollar income per square foot than was needed when the rents were much lower. Public policy now is that everything new must follow the law. As a result, A.D.A. doesn''t really offer much in the way of tax benefits for building a new laundry. However, there are substantial benefits for those making changes to an existing laundry in order to better comply with that law and making their coin laundry business more handicapped accessible. Using A.D.A. tax credits, operators can have new washers, dryers and change machines with Uncle Sam paying about half of the cost. This is true only if it can be shown that the new equipment purchase was done for the purpose of making the laundry more handicapped user friendly. Check with your CPA. The way it works is, in any calendar year, $10,250 can be spent for new laundry equipment, and the owner can claim $5,000 as a tax credit for that year. As this can be done each calendar year, one could buy equipment in December and again in January for a total tax credit of $10,000. Of course one would have to be making money and owe taxes before the credits would be of use. Tax credits are carried forward until needed. Your tax professional will be the best advisor as to the wisest use of this potential tax benefit. Ramifications of the law to consider. There''s serious potential consequences -possible for laundry operators who totally ignore the purpose of the Americans with -Disabilities Act. Every business must show that they have made some reasonable attempt to make their premises user friendly for those who have handicaps. If they don''t, then a handicapped person can bring a suit against them. They can claim they were discriminated against because they did not have reasonable access or else could not find equipment they could use in the laundry, such as a bill change machine being out of reach, a soap vendor being too high or the laundry not having washers they could use from a wheelchair. If change machines are not reachable by wheelchair bound customers, it''s discrimination against the handicapped. Perhaps the nastiest part of this law is that a handicapped person can make claim of discrimination and the claim will be pursued against the business by government. The Feds pay all expenses of any suit and their client reaps the rewards from any legal victory. One CPA told the News that the Justice Department now has a backlog of over 100,000 cases. A number of such lawsuits have been either filed or threatened in San Diego County, according to the local county association. These have been previously reported in the News. We have also been told that 4 to 5 laundries per week in S.D. county have been sued. One of the nicest parts of the ADA law is that businesses that existed prior to the effective date of the law need only to show they have made a REASONABLE attempt to comply and may be exempt. We have also been told that no one is grandfathered in. Ask your attorney. What might be considered reasonable? If operators had doorway barriers to keep laundry carts from being taken, keeping that barrier might not show reasonableness. If one can''t get a cart out of the door, then wheelchair bound customers can''t go through either, and that''s a violation of the law. So if an operator has not removed the barrier, a judge might consider that lack of effort to comply as being unreasonable. If there are not sufficient washers and dryers within reach of the handicapped, that too could be considered as not having made a reasonable effort to comply. The way most in this industry have interpreted the ADA rules is that operators must spend some money to comply, but not necessarily huge amounts. We have also been told that by spending $1,000 you can cut risks of being sued, under ADA, by up to 90%. If there isn''t a ramp allowing access for wheelchair bound people to use your laundry, they can sue. A judge will likely find that it is unreasonable to expect a tenant to pay for installing the necessary ramps. In this case it should be the landlord or property owner who would be responsible. For an example, the cost of renovating a lavatory to current handicapped standards might not be required under a reasonableness standard, as this would turn out to be a very expensive retrofit. If the laundry''s lavatory was there from the time the place was first built, there may be no legal reason to change it. However, if you pay for major renovations to the laundry, then you may have to include re-doing the lavatory to meet the current standard for a handicapped person friendly restroom. Balanced against the risks, the tax benefits offered by the Americans With -Disabilities Act may not be altogether beneficial, or too bad for laundry operators. But they are available and when you are buying equipment anyway, why not take advantage? Because of the reasonableness standard requirements and the small risks, taking advantage of the tax breaks might seem to be the sensible road for a smart laundry owner to take. You greatly cut down the risk of being sued while adding to the potential profitability of the laundry. It''s win, win.