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Retail Advocate

 July 2007

State Issues

Sales Tax Holidays 2007-2008

Legislation passed by the 2007 General Assembly adds two new Virginia sales tax "holidays" to the calendar for retailer dealers. The sales tax holidays that will occur from August 2007 through May 2008 are:

August 3-5, 2007: School Supplies and Clothing. During this three-day period, purchases of certain school supplies, clothing and footwear will be exempt from the Virginia sales tax. Each eligible school supply item must be priced at $20 or less, and each eligible article of clothing and footwear must be priced at $100 or less.

October 5-8, 2007: New! Energy Star Qualified Products. During this four-day holiday, purchases of products meeting the Energy Star qualifications, such as certain energy-efficient appliances, will be exempt from the Virginia sales tax. Eligible products must be priced at $2,500 or less for each item, and be purchased for noncommercial home or personal use.

May 25-31, 2008: New! Hurricane Preparedness Equipment. During this seven-day period, purchases of items designated by the Department of Taxation as hurricane preparedness equipment, including portable generators, will be exempt from the Virginia sales tax. Portable generators must be priced at $1,000 or less, and other eligible items must be priced at $60 or less for each item

In addition, dealers may choose to absorb the sales and use tax on nonqualifying items sold during any of the holiday periods described above.

Check back for the implementation of our Sales Tax Holiday Information Center in the coming weeks. The Information Center will offer guidelines, FAQS, and lists of eligible items for each of the Virginia sales tax holidays.

To print out a Sales Tax Holiday Participating Retailer Sign, click on the links below:

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Virginia General Assembly Contested House & Senate Races 2007

Click here for the House Races and click here for the Senate Races as compiled by Virginia Free.

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Virginia's Estate Tax (Death Tax) Ended Sunday, July 1, 2007

Click here for more information.

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Dominion Virginia Power Fuel Rate Increase Effective July 1, 2007

Click here for more information.

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FEDERAL Issues*

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

Minimum Wage Increase Effective July 24, 2007

Click here for the new Minimum Wage Poster.

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Senate Rejects Card Check Bill

Nearly lost in the commotion over the defeat of immigration reform legislation was a victory for the retail industry as the Senate rejected H.R. 800, the "Employee Free Choice Act," by failing to secure the 60 votes necessary to move forward with the bill.

"The Senate agreed to continue to allow union members the same rights to vote privately as they do on Election Day," NRF Senior Vice President for Government Relations Steve Pfister said. "A vote is a private matter and should be cast as such -- the rejection of this legislation saves workers from potential oppression and bullying."

As with the immigration bill, Senate Majority Leader Harry Reid, D-Nev., attempted to invoke cloture, which requires a supermajority of 60 votes, on the card check bill in the hopes of ending debate and voting on passage. Supporters were able to gather only 51 votes, with a single Republican -- Arlen Specter, Penn. -- joining every Democrat to support the motion.

NRF is leading the retail industry's fight against the card check proposal. Among other activities, NRF is a member of the management committee of the Coalition for a Democratic Workplace, a broad-based business group formed to oppose the legislation, and co-chairs the group's lobbying committee.

"Even though the immediate battle is over, the challenge on this issue is long term," said Rob Green, NRF's Vice President for Government and Political Affairs. "We won the fight this year, but organized labor will not give up easily -- this issue will most certainly come before Congress again -- and we must continue to be vigilant in standing up for the privacy rights of workers across the country."

The bill would require the National Labor Relations Board to certify a union if presented with signed authorization cards from a majority of employees the union is seeking to organize, eliminating the long-standing National Labor Relations Act requirement for federally-supervised secret ballots in union elections. The legislation also includes other dangerous provisions such as compulsory arbitration of first contracts.

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Retail Depreciation Bill Introduced in House

Another retail legislative priority took a step forward this week as legislation to shorten the depreciation period for remodeling and other improvements made to retail stores was introduced in the House of Representatives.

H.R. 2936, introduced yesterday by Chairman of the Subcommittee on Select Revenue Measures, Rep. Richard Neal, D-Mass., would permanently reduce the depreciation period for improvements to retail stores to 15 years from the current 39 years and would apply to both leased and owned stores.

Under current law, improvements made to leased stores can be depreciated over 15 years but improvements made to stores that are owned must be depreciated over 39 years. The Neal bill would make permanent the 15-year depreciation period for leased stores (currently set to expire December 31, 2007) and expand it to owned stores so that the depreciation period would be 15 years for both.

In introducing the bill, Neal said there is little reason for the distinction between owned and leased stores. "Ownership signifies a long-term commitment to the community. We should at least level the playing field for these community-based businesses," said Neal in his introductory remarks on the House Floor.    

Similar legislation was introduced earlier this year by Senators Olympia Snowe, R-Maine, Blanche Lincoln, D- Ark., John Kerry, D-Mass., and Kay Bailey Hutchinson, R-Tex.

"Retailers must update their stores every five to seven years in order to compete," NRF Vice President and Tax Counsel Rachelle Bernstein said. "The Neal bill gives us a depreciation period that is more realistic and treats all retailers the same without discrimination."

Studies conducted by the Treasury Department, the Congressional Research Service and private economists found the current 39-year depreciation period exceeds the life of improvements made to buildings as well as the economic life of the building itself.

NRF has led the retail industry's efforts to have the depreciation period set at 15 years for both leased and owned stores. "With approximately half of retail stores owned, there needs to be parity in the industry," said NRF Senior Vice President for Government Relations Steve Pfister.

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CPG Companies Tackle Counterfeit Goods Market

Counterfeit versions of everyday consumer products such as toothpaste are proliferating across global markets, costing governments lost tax revenue and raising safety concerns. Asia currently is the largest source of counterfeit goods and international crime organizations have found that counterfeit cigarettes are particularly profitable. Click here for the full article. << Back to top

Senator Introduces Healthy Employee Legislation

U.S. Senator Tom Harkin proposed awarding tax credits to businesses that help their employees eat better, exercise, manage stress and quit smoking.

Legislation introduced Monday by Harkin, a Democrat from Iowa, and Senator Gordon Smith, a Republican from Oregon, would give companies a tax credit of $200 for each of the first 200 employees participating in wellness programs offered at work, and as much as $100 for each additional participant.

Obese employees and those who smoke cost companies more in health-care expenditures and take more sick days, according to the Partnership for Prevention, a Washington nonprofit organization that supports disease-prevention policies. Companies that spend money to encourage healthy habits save on medical costs, Harkin said.

"The idea is to make it easier for businesses to help their employees get healthy, stay healthy and stay out of the hospital," said Harkin, the chairman of the Senate Appropriations subcommittee on health, at a press conference.

Congressional budget analysts haven't yet estimated how much the tax breaks would cost the U.S. treasury, Harkin said.

The tax incentives would allow more small and medium-sized companies to offer disease screenings, support groups for employees trying to quit smoking, on-site fitness centers and nutrition classes, said Paul Speranza, the chairman of the U.S. Chamber of Commerce, a federation of business groups, at the press conference.

"Larger companies already have the resources for these kinds of things," said Speranza, who is also vice chairman of closely held Wegmans Food Markets Inc., based in Rochester, New York.

The Rochester Chamber of Commerce has worked with 86 local companies, including Wegmans and Eastman Kodak Co., to develop disease-prevention programs for their employees, Speranza said.

Under the legislation, companies would qualify for the tax credit only if their offerings met at least three of four criteria: events that raise awareness and assess health risks, seminars that foster behavioral changes, incentives for those who choose to participate and a committee to oversee company health opportunities.

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