Broker Check

August 30, 2004


Temporary Sales and Use Tax Exemption

on clothing, footwear, and items used to make or repair exempt clothing will exist for the week of August 31, 2004 through September 6, 2004.  Exempt clothing will consist of items costing less than $110 per item or pair.  The exemption will consist of NYS and NYC sales taxes except for Nassau County, Westchester County (outside of Mt. Vernon, New Rochelle, White Plains and Yonkers), Orange and Putnam County. New York State TSB-M-04(5)S 

Series E & EE Savings Bond Reminder

            After August 31, owners will not be able to trade in those securities for Series HH bonds because the US Treasury will not issue any more Series HH bonds.  Owners of E and EE bonds can still convert them to HH bonds before September without triggering tax on the accrued interest.  Kiplinger Tax Letter July 16, 2004

 Defined Benefit Plans Are Going the Way of the Dinosaur

            Big firms are shelving them again.  Sears and NCR are declining to cover newly hired workers or those under age 40.  Instead, they will make larger matching contributions to their 401(k) plans.
            The wave of pension plan cutbacks is in reaction to higher funding needs due to low interest rates.
            In 2003, the percentage of major companies offering defined benefit plans, which guarantee a set level of benefits in retirement, was 68%, a substantial decline from the 85% that did so in 1990.
            The implications are huge.  We suggest you raise the level of saving for your own retirement by contributing to your 401(k), IRA, Roth IRA, and other savings to compensate. Kiplinger Tax Letter July 16, 2004, FInancial Advisor August, 2004 p.28 

Canadian Drug Caveat

            You, like all Americans, have been inundated with stories in newspapers, on television, radio and the Internet about saving money by buying prescription drugs from Canada.  The stories say that people are saving money and that the government and pharmaceutical companies are trying to put a stop to it.  But they do not tell us much else.
            You may be hearing about all this and wondering if you could save money on your own medicines by purchasing them from Canadian pharmacies.  If you do, what would the consequences be?  Let me help you answer these questions.
            First and most importantly, it is illegal.  The FDA says it is “extremely unlikely that any pharmacy located in Canada could ensure that all of the applicable legal requirements (for importation of medicines into the United States) are met”.  That being said, all the information out there makes this point confusing.  Individuals and some cities are doing it, and some state and local governments are talking about doing it while providing referral information about Canadian pharmacies to their residents.  An FDA policy allowing, “individuals and their physicians to bring into the United States small quantities of drugs sold abroad for a patient’s treatment of a serious condition for which effective treatment may not be available domestically” has been confused as permitting individuals to import medicines for their personal use no matter what.  According to the FDA, this policy describes the agency’s “enforcement priorities” but does not change the law.  However, the FDA concedes that there have been few prosecutions against individuals for personal importation, even though it can.
            Second, you might experience savings from ordering prescriptions from Canada, but then again you might not.  Some medicines are much cheaper in Canada, while others are the same price.  But remember to factor in shipping and handling costs.  If you research a Canadian pharmacy, either by phone or through the Internet, calculate the price per pill, including shipping, for your particular medicine, and compare it with the price at an American pharmacy.  Also look into generic medicine, which is usually less expensive.
            Third, from a safety standpoint, you’ll want to check the licensing of any Canadian pharmacy from which you buy medicine.  You can check with the pharmacy regulatory agency for the Canadian province where the pharmacy is located (usually a college of pharmacy association; e.g., The College of Pharmacists of British Columbia).  According to the Canadian International Pharmacy Association, if an American has a problem with products purchased at a Canadian pharmacy the patient has the same rights as a Canadian patient to file a complaint with a provincial pharmacy regulatory agency.
            Friends and peers are also excellent sources of information on this issue.  Ask around your community to see if anyone has purchased medicine from a Canadian pharmacy and what their experience was like.
            Make sure you do all of these things before making a purchase:
1.      Know that importing prescription drugs from Canada is illegal.
2.      Compare the prices of your particular medicine(s) at pharmacies at home and abroad.
3.      Make sure your cost savings are not so slim as to be negated by the cost of shipping.
4.      Research the pharmacy’s licensing in Canada. Research Institute of America

If you have any questions about the foregoing or any other financial matters, please call us.  If you want to read more, visit the AOHL Newsletter Archives at

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