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Local Issues

City of Richmond - False Alarm Ordinance Amendments

The City of Richmond is currently reviewing its False Alarm Ordinance. Click here to see the recommended changes.  Please review and forward any concerns you may have to gpeyton@retailmerchants.com.

State Issues

• Smoking Ban in Restaurants
• Sales Tax Holiday - August 3-4-5
• Energy Star Sales Tax Holiday - October 5-6-7-8
• Virginia Child Labor Law Requirements
• 2007 Retail Passed Bills With Effective Date of July 1st
• All 2007 Legislation Approved by Governor or Enacted
• June 12 Primary Results Compiled by Virginia FREE

Smoking Ban in Restaurants

Sales Tax Holiday - August 3-4-5

Tax exempt items for this three day sale event are clothing and footwear costing $100 or less per item and school supplies costing $20 or less per item.

The sale items may be extended beyond the exempt items if the retailer pays the tax for the customer.  This is essentially giving the customer a 5% discount.  However due to Virginia law, retailers may only advertise that they will pay the tax for the customer during the event and 14 days before the event.

RMA members who experienced the best sales results during the 2006 event combined the 5% tax savings with other promotional offers. The combined percentage off spurred sales and the key to success was advertising to the customer that the store was participating in the "TAX FREE DAYS".  The driving force for customers was not having to pay tax.

The Department of Taxation will post guidelines on their web site; however if you have questions please call George Peyton at (804) 662-5505 or email gpeyton@retailmerchants.com. << Back to top

Energy Star Sales Tax Holiday - October 5-6-7-8

This Tax Holiday is new for 2007. It offers a four day tax exemption on very specific energy star rated items; however, it allows all retailers to participate in the tax holiday if they absorb the tax for the customer.  For example, if a mens and womens clothing store or jewelry store, etc., wants to advertise their entire inventory TAX FREE for the four day period, they may begin advertising the event 14 days prior to October 5th and beginning on October 5th, rings all transactions TAX EXEMPT.  The retailers must report the 5% tax on all transactions to the Commonwealth. Click here for the summary of legislation and click here for the complete bill.

Below is the language in the legislation that describes the Energy Star Sales Tax Holiday.  

18. Energy Star qualified products with a sales price of $2,500 or less per product purchased for noncommercial home or personal use. The exemption provided by this subdivision shall apply, beginning in 2007, only to sales occurring during the four-day period that begins each year on the Friday before the second Monday in October and ends at midnight on the second Monday in October.

For the purposes of this exemption, an Energy Star qualified product is any dishwasher, clothes washer, air conditioner, ceiling fan, compact fluorescent light bulb, dehumidifier, programmable thermostat, or refrigerator, the energy efficiency of which has been designated by the United States Environmental Protection Agency and the United States Department of Energy as meeting or exceeding each such agency's requirements such requirements under the Energy Star program.

The language below authorizes all retailers to absorb the tax for the customers during the 4 day Energy Star Tax Holiday.

All sums collected by a dealer as required by this chapter shall be deemed to be held in trust for the Commonwealth.

Notwithstanding the foregoing provisions of this section, any dealer is authorized during the period of time set forth in § 58.1-611.2 or subdivision 18 of § 58.1-609.1 not to collect the tax levied by this chapter or levied under the authority granted in §§ 58.1-605 and 58.1-606 from the purchaser, and to absorb such tax himself. A dealer electing to absorb such taxes shall be liable for payment of such taxes to the Tax Commissioner in the same manner as he is for tax collected from a purchaser pursuant to this section.

§ 58.1-626. Absorption of tax prohibited.

No person shall advertise or hold out to the public, directly or indirectly, that he will absorb all or any part of the sales or use tax, or that he will relieve the purchaser, consumer, or lessee of the payment of all or any part of such tax. Any person who violates this section shall be guilty of a Class 2 misdemeanor. The prohibitions contained in this section shall not apply during the time period (October 5-6-7-8) set out in § 58.1-611.2 or subdivision 18 of § 58.1-609.1 or during the 14 days immediately preceding such time period for advertisements relating to sales to be made during the time period set out in § 58.1-611.2 or subdivision 18 of § 58.1-609.1.

Virginia Child Labor Law Requirements

The RMA was contacted by the Virginia Department of Labor and Industry regarding child labor law compliance. As you know this is the time of year many young Virginians will be looking for employment or returning to jobs they previously held. For this reason, the Virginia Department of Labor and Industry is seeking to heighten awareness of Virginia’s child labor laws through outreach efforts to the business community. The Agency requested that the RMA provide the child labor requirements to our members. Click here for the requirements >>

2007 Retail Passed Bills With Effective Date of July 1st

Click here for the bills >>

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All 2007 Legislation Approved by Governor or Enacted

Click here for the the list >>

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June 12 Primary Results Compiled by Virginia FREE

Click here to see the results >>

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FEDERAL Issues*

© 2007. NRF Enterprises, Inc. used with permission.*

• Minimum Wage to Begin Rising July 24, 2007
• Senate bill would ban retailers from operating banks
• Retailers advocate Nevada bill to end organized retail theft rings
• Senior Ways and Means Member Backs Retail Depreciation Change
• House passes bill barring commercial companies from owning controversial banks

Minimum Wage to Begin Rising July 24, 2007

An increase in the federal minimum wage signed into law by President Bush will begin to take effect next month as the first step in a two-year phase-in.

The current $5.15 minimum will rise to $5.85 60 days after enactment of the legislation, which was signed on May 25. The Department of Labor has yet to issue regulatory guidelines setting the official date for implementation, but 60 days would be July 24. The figure would rise to $6.55 in July 2008 and to $7.25 in July 2009.

Most retailers already pay more, but small merchants and those in rural areas could be affected, and the increase could create a ripple effect of higher-paid workers demanding a corresponding increase.

The wage hike was included in an unrelated bill to fund the war in Iraq.

The bill also included a $4.8 billion package of tax relief measures intended to ease the impact of the wage increase on small businesses. Among other provisions, the Work Opportunity Tax Credit set to expire at the end of this year will be extended for three and a half years, and the Section 179 small business expensing limit will increase to $125,000 through the end of 2008.

WOTC provides an annual tax credit of $2,400 to companies that hire welfare recipients or other economically disadvantaged individuals. The figure is enough to offset slightly more than half the amount of the wage hike for a minimum wage employee working 40 hours a week for a full year.

The package left out an NRF proposal previously approved by the Senate that would let retailers who own their own stores depreciate improvements over the same 15 years as those who own their stores rather than the current 39 years. But standalone legislation to make the change is pending in the Senate and expected to be introduced soon in the House. Action is expected later this year, either as an individual bill or as part of the annual "extenders" bill to renew tax provisions that are set to expire. Without action, the 15-year depreciation for leased stores would revert to 39 years after December 31.

The tax package was a compromise between the $1.8 billion in relief approved earlier this year by the House and $12 billion passed by the Senate, and two key senators were disappointed that the final number wasn't higher.

"It is a missed opportunity," Senate Finance Committee Chairman Charles Grassley, R-Iowa, said. "We could have provided small businesses with meaningful tax relief that is contemporaneous with the effects of the minimum wage hike."

Senate Health, Education, Labor and Pensions Committee Ranking Member Mike Enzi, R-Wyo., said the package "fails to acknowledge and adequately offset the impact of such an increase on our small businesses."

Senate bill would ban retailers from operating banks

A trio of senators on the Banking, Housing and Urban Affairs Committee introduced a bill Thursday that would ban retailers from starting, operating or acquiring a bank. A similar version of the bill is expected to win approval in the House. Christopher Dodd, D-Conn., chairman of the banking committee, has not said whether he would support the bill.

Retailers advocate Nevada bill to end organized retail theft rings

Retailers are lobbying Nevada lawmakers to pass a bill that would crack down on organized theft rings that steal in small quantities and resell the items in different markets. The efforts are part of a growing trend, as many state legislatures are considering similar laws.

Senior Ways and Means Member Backs Retail Depreciation Change

 A senior member of the House Ways and Means Committee this week said he would support a major change in depreciation rules that would let retailers who own their stores write off the cost of improvements over the same time period as those who lease their stores.

Representative Richard Neal, who has jurisdiction over tax issues as chairman of the Ways and Means Subcommittee on Select Revenue, was among the speakers at NRF's 72nd Annual Washington Leadership Conference.

Neal appeared Tuesday before the NRF Policy Council, where he was asked about a proposed change in depreciation rules that would allow retailers who own their stores to write off improvements over the same 15 years as those who lease their stores rather than the current 39 years.

"I am with you 100 percent on that," the Massachusetts Democrat said. "The request is entirely reasonable."

The depreciation change was approved by the Senate earlier this year but was left out of a minimum wage/tax relief package both chambers attached to an unrelated supplemental spending bill to fund the war in Iraq.

Neal said the Iraq legislation is not the right vehicle to fix retail depreciation, and that he plans to introduce the depreciation provision as standalone legislation in the near future. Neal's bill is expected to be similar to S. 271, which was introduced earlier this year by Senator Olympia Snowe, R-Maine.

Neal noted the testimony of constituent Dave Ratner, a Massachusetts pet supply store owner who argued in favor of small business tax relief on behalf of NRF before the Senate Finance Committee earlier this year. With convincing arguments on how the difference in depreciation rules discriminates against Main Street retailers trying to compete with large chains, Ratner was "a very effective lobby of one," Neal said.

Meanwhile, Senator Ben Nelson, D-Neb., was doubtful that the minimum wage/tax relief package will become law as part of the Iraq supplemental, but said he expects tax relief to accompany a minimum wage increase if a wage hike is passed.

"I don't know if I can tell you that the minimum wage increase is going to survive," Nelson said as he delivered a "View form the Senate" address on Wednesday. "But if it does survive, it has to have tax breaks for small business, no doubt about it. I have not understood the resistance to tax breaks by my colleagues on the House side. I do not believe one (minimum wage or tax relief) will survive without the other."

Nelson, a centrist known for his ability to cross party lines and broker deals, did not comment specifically on the depreciation provision or indicate what other components he expects in the tax package.

President Bush on May 1 vetoed the Iraq bill passed by Congress last month -- including the $4.8 billion package on minimum wage tax relief -- but the House last week passed a revised version that still includes the tax package. The Senate this week stripped out most contents of the House bill -- including its Iraq language along with the tax and minimum wage provisions -- and passed it as a placeholder that will allow a final version to be negotiated sometime before Memorial Day.

Despite Nelson's doubts, minimum wage is a top priority for House Democrats and they are expected to fight hard to keep the minimum wage/tax relief package in the Iraq bill.

House passes bill barring commercial companies from owning controversial banks

The House overwhelmingly passed H.R. 698, which bars nonfinancial companies from setting up industrial loan companies, which have proliferated in recent years. Critics spoke out when Wal-Mart Stores applied to establish an ILC, saying the line between banking and commerce would have been blurred. Yahoo!/Associated Press

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