WHAT WE DID
In the legislative arena, defense often is as important as offense. And in 2006, the Alabama Retail Association stepped up its offensive game and scored more legislatively for retailers than it has in decades.
Create a Back-to-School Sales Tax Holiday
On Aug. 4th, 5th and 6th and every first weekend in August from now on, Alabama consumers can shop for:
- clothes valued up to $100;
- school supplies that sell for up to $50 each;
- all books worth up to $30;
- and computers and computer equipment valued up to $750
- and NOT PAY ONE PENNY IN STATE SALES TAX. In the cities and counties that opt in, the tax savings may be even greater. The state estimates a loss of $3.5 million in state sales tax, which means the state’s financial gurus expect $87.5 million in sales. For the past two years, Alabama Retail has championed this tax holiday and made its passage, its top legislative priority this year.
Collect the Uncollected
Milestone legislation that passed the Alabama Legislature this year requires any vendor who has a contract with a state department or agency to collect and remit sales taxes for everything that company sells within the state of Alabama. This legislation will collect taxes that heretofore have not been being collected. It is a first step to leveling the playing field between Alabama retailers and remote sellers. This legislation is aimed at companies without an Alabama presence or that do business mostly over the Internet. Currently, Alabamians can purchase anything over the phone or Internet without the seller collecting a sales tax from the Alabama consumer. Under Alabama law, the consumer who buys items over the Internet, is responsible for filing and paying a use tax to their city, county and the state, although this seldom happens. This bill will at least change that for companies that do business with the state.
Make Organized Retail Theft a Crime
Alabama Retail’s Loss Prevention Committee identified organized retail theft as its No. 1 problem, causing retailers more expense than any other crime and identifying it as the fastest-growing crime against retailers. It is now a felony and offenders must spend up to 20 years in jail and pay up to $10,000.
Allow You to Be Charitable and Be Tax Free
One member can make a difference. When state auditors told Bromberg’s & Co. in 2000 the company owed $500 in back taxes and interest on items the company had donated to charity, executives at the Birmingham-based jeweler didn’t think taxing charitable donations was right. Enter Alabama Retail. It took a few years, but the Inventory Reduction for Charitable Purposes Relief Act is now law. Any donation of inventory valued at less than $10,000 is no longer a taxable event after July 1. Feel free to donate inventory to the charity of your choice!
Reform City Business Licenses
After more than six years of negotiations between the business community and municipal governments, the Municipal Business License Reform Act of 2006 will become effective by the first of 2008. Alabama Retail was a party to those negotiations as well as the final streamlined system, which will be a relief from the complicated and burdensome licensing system retailers and other businesses have functioned under for way too long.
Make More Pharmacists Available
Alabama’s pharmacist shortage will see some relief thanks to Alabama Retail-supported legislation to allow licensing of foreign-trained pharmacists in our state. The Alabama Board of Pharmacy will set the standards the foreign pharmacists will have to meet, such as obtaining Foreign Pharmacy Graduate Examination Committee Certification, an internship or practicum in Alabama and proficiency of the English language. The Emergency Response Commission on Alabama’s Healthcare Crisis identified the licensing of foreign-trained pharmacists as crucial to our state’s healthcare system. Only three other states have fewer pharmacists to cover their population and fill their pharmaceutical needs. Before this legislation, Alabama was one of only three states that did not license foreign-trained pharmacists.
Require Employee Leasing Companies to Register
The Alabama Professional Employer Organization Registration Act requires professional employer organizations, commonly known as employee or staff leasing companies, to register with the state, including providing a list of all their client companies. The Alabama Department of Industrial Relations will receive securities or guarantees protecting payments of unemployment compensation taxes and workers’ compensation expenses from these companies. This legislation has been four years in the making and was the first item on the Alabama Retail Association’s 2006 legislative agenda to become law.
Make Stealing Someone’s Identity a Felony
All instances of identity theft are now a felony, punishable by one to 10 years in prison. The new law also extends the statute of limitations for identity theft cases to seven years, the normal number of years fraudulent information may continue to appear on a victim’s credit report. Identification fraud is one of the fastest growing forms of robbery costing financial institutions, businesses, government and consumers billions of dollars annually. Alabama Retail supports all efforts to wipe out this onerous form of criminal activity.
WHAT THEY DIDN’T DO
No legislation that would have been detrimental to retailers made it through the legislative process in 2006. Blocking bad legislation is as important, if not more important, than passing good legislation.
Make COOL Cool
Legislation that received favorable committee action but never made it to the floor of either chamber for debate would have required country of origin labeling (also known as COOL) for seafood items in “food service establishments.” It would have affected restaurants, cafeterias, grocery delis and other businesses that sell food to the public. This legislation was wrought with problems and conflicted in many cases with items exempted by the federal legislation implemented by grocers.
Turn Manufacturer Rebates into Retailer Deductions
Alabama Retail vehemently opposed legislation that attempted to transform a mail-in cash rebate from the manufacturer into an in-store coupon that the retailer had to deduct from the product price at the time of the sale. Even worse, this bill would have allowed the consumer to bring a cause of action against the manufacturer and recover damages if the instant rebate was denied. Alabama Retail put the brakes on this bill in committee.
Card Dietary Supplement Users
Alabama Retail persuaded a sponsor not to pursue legislation that would have made retailers misdemeanor criminals if it had passed and they had been in violation. The legislation would have required retailers to ask for valid identification from those who tried to purchase dietary supplements containing certain ingredients and who appeared to be younger than 18.
Take the Party Out of Elections
Alabama Retail remained firmly planted in its deep-rooted opposition to nonpartisan election of judges in Alabama. Party affiliation sometimes is the only indicator of a candidate’s judicial philosophy. Legislation advocating nonpartisan judicial elections didn’t even make it out of committee.
Mandate Health Coverage
In its continuing effort to contain escalating health insurance costs, Alabama Retail maintained its opposition to all new healthcare mandates, such as mandatory diabetes coverage. With the cost of health insurance continuing to sky rocket, additional coverage requirements would only push those costs into the stratosphere.
WHAT’S LEFT TO DO
Some issues weren’t addressed by lawmakers in 2006 and must be revisited next year.
In 1999, the Alabama Civil Justice Reform Committee, a 300-member committee of business and pro-business organizations of which Alabama Retail is an active member, won approval of three landmark tort reform bills – punitive damage caps, limits on venue shopping and a ban on drive-by class action lawsuits. Since that time, Alabama Retail and other ACJRC members have been fighting for the completion of that tort reform package. In 2006, the three-bill tort reform package received a public hearing, but no vote was taken. Alabama Retail will continue to support those bills, which would reduce the post-judgment interest rate, cap mental anguish and limit product liability awards.
Alabama Retail this year also supported legislation that would have abolished frivolous obesity lawsuits. That legislation did receive committee approval but passed too late in the session to make it through the process. Alabama Retail will be back advocating its passage next year.
Sales Tax Holidays for Energy Efficiency and Hurricane Supplies
Alabama Retail will be back supporting two other sales tax holidays, an energy savings month and a hurricane and other weather emergencies month. During the “Energy Savings Month” in October, certain ENERGY STAR® appliances would be exempt from sales taxes to help educate and provide incentives for Alabamians to save and conserve energy. Under the bad weather legislation, certain items needed in storm situations would be exempt from the state sales and use tax during the month of July.
Streamlined Sales Tax Initiative
While remote sellers with state contracts will have to start paying Alabama sales taxes under legislation Alabama Retail championed this year, Alabama Retail wants that level playing field for ALL retailers doing business in Alabama. For that reason, Alabama Retail will continue to lobby for the streamlined sales tax initiative, which will provide a simplified sales tax system that makes the collection of sales taxes more manageable for businesses and requires all sellers – brick-and-mortar, catalog and Internet – to collect and remit sales taxes.