A reconfigured Alabama Legislature hit the ground running and never stopped during the regular session that ended June 9, 2011. More Alabama Retail Association supported legislation than ever became law. Seven items on Alabama Retail’s 2011 Legislative Agenda along with many other bills that the association supported or monitored became law. Alabama Retail continued to advocate for legislation that benefits your business, while protecting retailers from potentially damaging legislation.
WHAT YOU DID
Protect Retailers from Product Liability
As of June 9, 2011, no one can sue an Alabama retailer for a defective product, unless that retailer also manufactured, designed or altered the product. The only other exception is if the manufacturer cannot be identified. The product liability lawsuit ban also applies to wholesalers and distributors.
The Alabama Civil Justice Reform Committee, a group of more than 100 businesses and pro-business organizations of which ARA is an active member prevailed during this year’s legislative session with product liability protection and these other reforms:
- Since June 9, wrongful death lawsuits can only be brought in a county where the deceased could have filed suit, such as the county where the deceased lived or died.
- A stricter standard for determining whether to admit scientific expert testimony will apply to any civil action brought on or after Jan. 1.
- The rate of interest on judgments entered on and after Sept. 1, 2011, in Alabama will be 7.5 percent. The current rate is 12 percent.
Double the Deduction
Starting with 2011 tax returns, retailers and other businesses with 24 or fewer employees and their employees who earn $50,000 or less can double the amount they pay out for health insurance and deduct it from their 2011 income tax returns, an increase from the 150 percent deduction ARA and its allies achieved in 2008.
Make a Modest Increase in Consumer Credit Late Fee
A modest $8 increase in late fees for delinquent consumer credit payments from $10 to $18, which ARA had advocated for since 2007, is now reality. Furniture, appliance and other stores that offer in-house financing can now charge a late fee of $18 or 5 percent of the scheduled payment up to $100 on all consumer credit transactions that have been delinquent for 10 days or more.
Prepare the Way for the Day When All Retailers Collect Sales Taxes
ARA and the Association of County Commissions of Alabama convinced lawmakers to create the Alabama Streamlined Sales and Use Tax Commission, which will prepare our state to join the federal Streamlined Sales Tax Agreement in the event federal law ever activates the agreement. An Alabama Retail Association representative will be one of the eight commission members, who will research Alabama’s current sales and use tax laws, identify necessary changes to bring the state into compliance with the federal agreement and make a report to the Legislature by the fifth legislative day of the 2012 session.
Give Small Businesses a Tax Break for Creating Jobs
Beginning with the 2011 tax year, retailers and other businesses with 50 or fewer employees can claim a one-time, $1,000 income tax credit for each new $10-or-more-per-hour job the business creates. Businesses can claim the one-time credit in the tax year during which the new hire(s) complete 12 months of consecutive employment. To qualify for the credit, an employer must have a net increase in full-time employees in Alabama on the last date of the tax year in which the credit is claimed compared with the number employed on last day of the previous tax year.
Ban Local Governments from Requiring Nutrition Labeling on Menus
ARA supported the Alabama Restaurant Association’s efforts to ban local nutrition labeling requirements for restaurant menus. The new law prevents Alabama from having a patchwork of local labeling laws and saves restaurants from unnecessary and costly regulation.
WHAT THEY DIDN’T DO
Punish Thieves Less for Stealing More
Legislation that called for a 100 percent increase in the felony shoplifting threshold and a 1,000 percent increase in the value of property that qualifies as organized retail theft never received widespread legislative support. ARA was able to get lawmakers to make the legislation aimed at easing prison overcrowding more palatable for retailers, but in the end, lawmakers left the bills that downgraded many retail crimes off their agenda for this year.
Tax You Out of Business
ARA successfully opposed required unitary combined reporting for corporate taxpayers as part of your 2011 Legislative Agenda. Other failed tax legislation would have decoupled Alabama from the federal depreciation schedule, preventing Alabama businesses from taking advantage of the bonus depreciation offered in the federal Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010.
Mandated time constraints and extensive disclosures on rebates didn’t get past committee approval this session.
Make Pseudoephedrine Available by Prescription Only
A push to make ephedrine/pseudoephedrine products controlled substances in Alabama never even made it out of committee. Prescription-only availability would have driven up costs by as much as 50 percent. Our state has been a leader in controlling the sale of these products, putting them behind the counter two years before required to do so by the federal government and being among the first states to enact electronic tracking.
Cloud Pharmacists’ and Healthcare Providers’ Consciences with Mandates
A mandate that didn’t receive a floor vote would have allowed healthcare providers to refuse healthcare services that violate their conscience. This legislation also would have interfered with pharmacy and other healthcare employers’ ability to discipline employees for violating company policies or procedures.
Tough Immigration Law to Take Effect in Phases; Business Portion Expected to Stand
Alabama’s new law governing illegal immigrants, the Beason-Hammon Alabama Taxpayer and Citizen Protection Act, applies to every business in the state, including retailers and restaurants.
- IMMEDIATE: The only provisions of the new law that took effect immediately authorize the Alabama Department of Homeland Security and law enforcement to hire new officers to prepare for enforcement.
- SEPT. 29 (Originally Sept. 1): Some provisions of the law became effective on this date, mostly related to actions of illegal immigrants. The major provisions concerning business have later implementation dates.
- JAN. 1, 2012: By the first of next year, businesses with government contracts, grants or incentives will need to obtain notarized affidavits from subcontractors stating that the subcontractors do not employ any unauthorized aliens. It is unclear if pharmacies and other medical-related retailers with Medicaid contracts and grocers that accept Women, Infant and Children (WIC) funds are subject to this provision.
- APRIL 1, 2012: By April 1, 2012, every Alabama employer must enroll in the federal E-Verify program, which allows employers to check the citizenship status of both current workers and job applicants. The Alabama Department of Homeland Security will enroll businesses with 25 or fewer employees in the federal program. According to the Alabama Department of Industrial Relations, 79,944 of Alabama’s 88,055 private firms employ 25 or less. Roughly 95 percent of ARA members fall into this category.
Fight for E-Fairness
The Alabama Senate Rules Committee chairman blocked ARA-supported state legislation that would have educated Alabama consumers about taxes due when they buy goods over the Internet, by phone or by catalog. That bill would have helped move Alabama toward ending the sales tax advantage large online retailers have over your store. A federal Main Street Fairness Act, which would require all retailers to collect and remit sales taxes, is before Congress.
Tax Appeals Reform to Return in 2012
Legislation to create an independent and qualified tax appeals court in Alabama will return in 2012. The Taxpayers’ Bill of Rights II, which would have streamlined the tax appeal process, updated state tax statutes and helped the state’s tax laws conform with federal tax law, made it onto the Senate calendar in the final hours of the 2011 session, but time ran out.
Legislative Council to Review Gross Income Tax Fix
Legislation to fix the inequity in the state tax code regarding gross income taxes was being debated in the Senate when the clock ran out on the 2011 regular session. The Alabama Revenue Department has proposed a regulation change to address the inequity regarding pass-through entities, such as partnerships, limited partnerships, limited liability companies and S corporations. The Legislative Council will review that suggested change. ARA will keep you informed as that regulation develops and may continue to seek a fairer legislative fix in the 2012 session.