Tell Alabama's U.S. Senators
Join Fight for E-Fairness
State Panel Recommends
Single Sales and Use Tax Administrator
This week, the Alabama Streamlined Sales and Use Tax Commission issued its recommendations to the Alabama Legislature. Meanwhile, the author of two federal bills that call for an end to Internet retailers' tax advantage said without a national solution, some main streets "could disappear."
In anticipation of federal e-fairness legislation, the Alabama Streamlined Sales and Use Tax Commission issued its report Monday to the Alabama Legislature recommending the Alabama Department of Revenue be the single administrator for state and local sales and use taxes. ARA thanks Alvin Lewis, vice president of tax and payroll for Birmingham-based Books-A-Million, for his continued service as ARA's appointee to the Alabama Streamlined Sales and Use Tax Commission.
>> Read the commission's full report
Without federal legislation to level the sales tax collection playing field between online and Main Street retailers, many retail businesses in Alabama and elsewhere will fail.
"It's not a stretch to say entire Main Street shopping districts could disappear," Senate Majority Whip Richard Durbin, D-Ill., said on the floor of the U.S. Senate. Durbin is the lead sponsor of the long-pending Main Street Fairness Act (S. 1452 and H.R. 2701) and a co-sponsor of the more recent Marketplace Fairness Act (S. 1832). Another bill, H.R. 3179, the Marketplace Equity Act, also is before Congress. Any of the three federal bills would make it easier for states to require Internet sellers to collect sales tax just as local stores do.
>> Read a synopsis of the three federal bills
Reach out to Alabama's senators, Richard Shelby and Jeff Sessions, and ask them to support and/or co-sponsor S. 1832.
Call Shelby at (202) 224-5744 or e-mail him.
Call Sessions at (202) 224-4124 or e-mail him.
Fighting for a fix to the sales tax collection inequity is the Alabama Retail Association's top legislative priority.
To make any federal legislation work, Alabama will have to adjust its tax laws. HB 153 by Rep. Jack Williams, R-Birmingham, and SB 291 by Sen. Greg Reed, R-Jasper, would create a 20-member Alabama Sales, Use, and Lease Tax Simplification Task Force to further study the issue of streamlining and simplifying the administration and remittance of sales, use and lease taxes. The panel, which is part of the Republican majority's 2012 legislative agenda, is to report its findings to the Legislature by the third legislative day of the 2013 regular session.
House OKs Income Taxes Withheld Incentive
to Build, Expand or Retain Businesses
This week, the Alabama House of Representatives approved a two-bill package described by its sponsor as the "No. 1 issue in the state of Alabama" and by one of its opponents as the "most dangerous."
After making several amendments Tuesday, the Alabama House voted 69-19-1 to approve HB 160 by Rep. Barry Mask, R-Wetumpka, which allows companies in certain instances to use income taxes withheld from full-time employees to build, expand or retain operations in Alabama.
Most of Thursday's House debate involved HB 159, a constitutional amendment that requires the state's voters to approve the provisions of HB 160. The House approved the constitutional amendment on a vote of 65-22-2.
Under HB 160, from 50 to 90 percent of state income taxes normally withheld for additional employees hired as a result of an expansion, building or modernization project could be retained and used by the company to offset the project costs, depending on the number of jobs created.
Companies modernizing in order to keep jobs could also qualify if the company invests at least $500,000 in a disadvantaged area or $2 million elsewhere. Depending on where it is located, a retention project would have to retain between 67 and 80 percent of its current employees for five years to qualify.
SB 271, the companion measure by Sen. Phil Williams, R-Rainbow City, is pending before the Senate Job Creation and Economic Development Committee.
The Alabama Education Association (AEA) objects to the legislation saying it depletes the funds earmarked for education. AEA instead supports a $50 million bond issue that would put $30 million into career education and provide $20 million to encourage the Goodyear Tire and Rubber Co. to keep its plant and about 1,500 employees in Gadsden, which is one of the purposes of the legislation being pushed by the governor and other GOP leadership. Kentucky, Georgia and Mississippi have similar legislation. "Other states are trying to lure our existing industry away," Mask told lawmakers.
Senate Sends Capital Credits Bill to House
Tuesday, the Alabama Senate unanimously approved SB 48 by Sen. Arthur Orr, R-Decatur, which would allow companies that spend at least $100 million on capital improvements and hire at least 100 people to hold on to a tax credit for up to four years. Companies typically get a credit for 20 percent of their investment each year for 20 years. Orr's bill would allow a company that invests $400 million to carry over the credit for four additional years. The credit can be held for three extra years for a $300 million investment, two years for $200 million and one year for $100 million. The House companion, HB 140 by Rep. Micky Hammon, R-Decatur, is set for a 1:15 p.m. Wednesday public hearing before the House Economic Development and Tourism Committee.
Tax Credit for Hiring Veterans Goes To Senate
Tuesday, the House unanimously approved HB 152, The Heroes for Hire Tax Credit Act, by Rep. DuWayne Bridges, R-Valley, which gives businesses a total of $2,000 in tax credits for hiring veterans who recently returned home from a war. The bill increases the current $1,000 tax credit by another $1,000. The bill also gives recently discharged veterans tax credits of up to $2,000 for starting their own businesses. The bill, aimed at helping Iraq and Afghanistan war veterans, applies to unemployed veterans who are Alabama residents and were honorably discharged within two years of the date of hire. Wednesday, the Senate Finance and Taxation Education Committee approved the Senate companion, SB 163 by Sen. Tom Whatley, R-Auburn.
ARA AGENDA IN ACTION
House OKs Unemployment Compensation Fraud Bill
On a vote of 78-15 Thursday, the House approved HB 72 by Rep. Paul DeMarco, R-Homewood, which would require anyone convicted of falsely receiving unemployment compensation benefits to fully repay the state and disqualify them from receiving benefits for a year. That punishment would be in addition to criminal penalties and fines that already exist, plus the bill strengthens those punishments.
Fraud "means less money in the state's unemployment account for those who are truly unemployed," DeMarco told representatives. Paying out less in fraudulent benefits also would mean "the state won't have to increase the assessment for businesses," he said. The Alabama Department of Industrial Relations (DIR) estimates more than 12,000 people fraudulently received unemployment compensation in Alabama in 2011. During debate, DeMarco said that in the last two quarters, 6,567 cases of unemployment compensation fraud representing $5 million have been prosecuted.
Under the bill, DIR could intercept any federal or state funds due to those convicted of such fraud to recover the state's money. ARA supports legislation to reduce both unemployment and workers' compensation fraud as part of its 2012 agenda.
A public hearing on a similar bill, SB 137 by Sen. Paul Bussman, R-Cullman, is set for 9 a.m. Wednesday before the Senate Business and Labor Committee.
House Panel Approves; Senate Panel
to Consider Moving Unemployment Waiting Week
Wednesday, the House Commerce and Small Business Committee approved HB 285 by Rep. Jack Williams, R-Birmingham, which would move the one-week, unpaid waiting period for unemployment compensation from the 14th to the 1st week of benefits.
The Senate companion, SB 300 by Sen. Trip Pittman, R-Daphne, will come before the Senate Job Creation and Economic Development Committee at 3:30 p.m. Tuesday.
States with waiting periods in the first week of eligibility do so to give unemployment benefit administrators time to better evaluate what the unemployed individual is owed, cut down on overpayment and diminish the possibility of fraud.
Medicaid Asks for $500 Million;
Legislators' Initial Reaction is 'No'
Alabama Medicaid Commissioner Bob Mullins told lawmakers Wednesday that Medicaid needs $500 million in next year's budget to be viable. His budget assumes the agency can achieve $40 million in savings from hospitals and other health-care providers and another $30 million in savings from programs such as managed care for high-cost patients.
Mullins said he hopes to find savings in a pharmacy program aimed at reducing drug costs and a pilot program aimed at improving care while reducing utilization, a significant driver of health care costs. Medicaid serves about 900,000 Alabamians, 19 percent of the state's population. Legislative budgetary leaders expressed doubts that the agency will get the $500 million it is seeking.
Senate Panel OKs Carrying Forward
Capital Losses for Three Years
A bill to allow Alabama taxpayers to carry forward income tax deductions for capital losses for up to three years is headed to the full Senate for consideration. Wednesday, the Senate Finance & Taxation Education Committee approved SB 252 by Sen. Slade Blackwell, R-Birmingham, on a vote of 7-1-1.
No Bill Yet, But Governor Proposes
Severe Weather Sales Tax Holiday
While designating next week as Severe Weather Preparedness Week, Gov. Robert Bentley this week proposed a once-a-year sales tax holiday on weather radios, flashlights, generators and other supplies needed to help prepare for weather disasters. Such legislation has yet to be introduced this session.
Alabama Department of Emergency Management Agency spokeswoman Yasamie August told reporters that such severe-weather emergency essentials as bandages, disinfectant, other first-aid supplies and prepackaged tornado emergency kits could also be included in a sales tax holiday.
Meanwhile Thursday, Sen. Cam Ward, R-Alabaster, introduced SB 304, companion legislation to HB 267, introduced last week by Rep. Greg Wren, R-Montgomery, to add energy-efficient furnaces, refrigerators and other energy-efficient appliances and products valued at $1,500 or less to the list of items included in Alabama's annual sales tax holiday, which is held in August. ARA supports sales tax holidays as a way to encourage retail sales and create savings for consumers.
Now Both a Senate and a House Bill
Propose Unitary Combined Reporting
Sen. Marc Keahey, D-Grove Hill, this week introduced SB 333, which would require corporations to follow a set of unitary combined reporting rules when calculating their Alabama income taxes. Last week, Rep. Richard Lindsey, D-Roanoke, introduced an identical bill, HB 199. Such legislation would be detrimental to Alabama's ability to attract new businesses and keep the ones it has. Opposition to required unitary combined reporting for corporate taxpayers is part of ARA's 2012 Legislative Agenda.
Lawmakers Propose Tax-Exempt Insulin
and Other Diabetes Treatment Items
Lawmakers this week introduced legislation that would make the sale of insulin, insulin syringes, blood or urine testing supplies and related items used to treat diabetes exempt from any state, county, and municipal sales and use taxes if prescribed. The bill applies retroactively to open tax periods. HB 307 by Rep. Ron Johnson, R-Sylacauga, awaits consideration by the House Ways and Means Education Committee, while SB 309 Sen. Gerald Dial, R-Lineville, awaits consideration by the Finance and Taxation General Fund Committee.
Senate OKs Requirement for Online Legal Notices
Thursday, the Senate unanimously voted to approve SB 73 by Sen. Cam Ward, R-Alabaster, which requires legal notices be posted both in print and online. It requires that legal notices be uploaded to a statewide website and to the publication's website, if it has one, without an additional charge to whoever placed the legal ad in the print publication. The Senate Judiciary Committee approved the bill on Wednesday, Feb. 8. The bill now awaits consideration by the House Judiciary Committee.
Credit Report Security Freeze Clears House Panel
Wednesday, the House Financial Services Committee approved HB 15 by Rep. DuWayne Bridges, R-Valley, which would regulate Alabama residents' power to put a security freeze on their credit report. The bill prohibits a credit reporting agency from releasing a frozen credit report or score to a third party without the explicit consent of the consumer. The legislation also sets up methods by which a consumer can have the freeze lifted in under 15 minutes, should he/she wish to apply for credit. The bill incorporates ARA-requested changes.
Child Labor Law Revisions Moving
Legislation to update and clarify the state's child labor laws began moving through the legislative process this week. On a vote of 5-2-1 Tuesday, the Senate Governmental Affairs approved SB 174 by Sen. Jimmy Holley, R-Elba. The House State Government Committee will debate the House companion, HB 268 by Rep. Blaine Galliher, R-Gadsden, at 3 p.m. Wednesday.
The proposed revisions to current law would prohibit 14 or 15 year olds from working in a warehouse; require that employee records for minors be kept at the location where the minor works; clarify the acceptable documents needed to verify a minor's age; require employers to post their Child Labor Certificate; clarify that 16-year-olds and up can be employed as busboys and in other non-server positions in establishments where liquor is served; prohibit anyone younger than 18 from working in an adult establishment; allow for a range of civil penalties from $1,000 to $5,000.
Senate Next to Debate Bigger Beer Containers
Tuesday, a Senate panel approved legislation to allow bigger beer containers. SB 294 by Sen. Paul Sanford, R-Huntsville, sets a new maximum size for a can or bottle of beer at 24.5 ounces, an increase from the current 16-ounce maximum. The House companion, HB 264 By Rep. Jim Barton, R-Mobile, awaits action by the House Economic Development and Tourism Committee.
Bill Proposes 4% Rebate to Restaurants that Buy Alabama-Grown Food
Legislation to offer restaurants a rebate for buying Alabama-grown food products will be before the House Agriculture and Forestry Committee at 3:30 p.m. Wednesday. Under HB 37 by Rep. Joe Hubbard, D-Montgomery, restaurants could submit documentation of annual purchases of Alabama agricultural products to apply for a four-percent rebate from a state fund established by the bill. To be viable, the Legislature would have to appropriate money to the fund.
Ask Agencies to Consider Small Business
Before Rulemaking, Panel Says
Wednesday, the House Commerce and Small Business Committee approved HB 150 by Rep. April Weaver, R-Brierfield, which requires a small business regulatory flexibility analysis and a small business economic impact statement when a state agency proposes a new rule or rule change. The Administrative Procedure Act is now ready for consideration by the full House. The Senate Business and Labor Committee will take up the companion bill, SB 222 by Sen. Bill Holtzclaw, R-Decatur, next week.
This legislation also requires agencies to review rules that could impact small businesses every five years. Under the bills, a business is considered small if it is independently owned and operated and employs fewer than 250 full-time employees or has gross annual sales of less than $25 million.
Senate Panel Delays Vote on Small Business Loan Bill
The Senate Finance and Taxation General Fund Committee debated but did not vote Wednesday on SB 158 by Sen. Quinton T. Ross Jr., D-Montgomery, a constitutional amendment to transfer $150 million over three years from the Alabama Trust Fund to a Small Business and Job Creation Fund. The fund administered by the Alabama Development Office would provide loans to businesses. The maximum loan amounts would be $25,000 for businesses creating five to 10 jobs and $100,000 for businesses creating 11 or more jobs. As businesses make payments on the loans, the funds would be deposited back into the Alabama Trust Fund.
Committee members asked for more time to study the constitutional amendment and its ramifications.
The companion is HB 215 by Rep. Joe Hubbard, D-Montgomery, awaits consideration by the House Economic Development and Tourism Committee. ARA will continue to monitor both bills.
Alabama, Other States Should Control
Federal Health Funds, Panel Votes
Wednesday, the Senate Health Committee voted 5-2-1 to establish a Health Care Compact to remove Alabama and other states from federal health-care oversight. SB 258 by the committee's chairman, Sen. Greg Reed, R-Jasper, now goes to the full Senate. The legislation is being pushed by the American Legislative Exchange Council (ALEC) to create the Interstate Advisory Health Care Commission, which, with the approval of Congress, would be allowed to spend federal money on health care without having to abide by federal regulations.
Campaign Finance Bills Sent to Subcommittee
Wednesday, the House Ethics and Campaign Finance Committee referred two bills that would change campaign financing in Alabama to a subcommittee for further study. HB 200 by Rep. Chris England, D-Tuscaloosa, would prohibit corporations from contributing to a political action committee. HB 207 by Rep. Merika Coleman, D-Birmingham, limits campaign contributions to $500 for every election a candidate's name is on the ballot beginning with this year's election cycle.
OIL AND GAS
Dial Bill Would Repeal Gas Discount Ban
The Senate Commerce, Transportation and Utilities Committee on Thursday approved SB 315 by Sen. Gerald Dial, R-Lineville, which would repeal the prohibition against gasoline rebates or discounts that make the selling price at the pump below a retailer's or wholesaler's cost. The bill now goes to the full Senate.
NEXT LEGISLATIVE DAY:
The Alabama House meets at 3:30 p.m. Tuesday, Feb. 21, for the sixth meeting day of the 2012 regular session. The Senate meets at 5 p.m.
Joint Resolution Would Overturn
'Ambush' Union Elections
A joint resolution (SJR 36) introduced Thursday in both chambers of Congress would overturn a National Labor Relations Board (NLRB) decision that dramatically shortens the election period before a unionization vote. The resolution calls for Congress to use the Congressional Review Act to overturn the new election rules adopted by the NLRB in December. Under those rules, union organizing elections could be held in as little as 14 days after a union files a petition, down from a current median of 37 days for most elections and an average 101 days for those where legal challenges are filed. Without congressional intervention, those changes are scheduled to take effect April 30.
Unlike typical bills that require 60 votes to clear procedural hurdles in the Senate, the Congressional Review Act would require only a simple 51-vote majority to pass. The measure would then require House approval before the NLRB regulations could be overturned. The Review Act has been successfully used only once before, to overturn Labor Department ergonomics regulations in 2001.
ARA, the Retail Industry Leaders Association
and the National Retail Federation support this effort.
Part of the December rules set to take effect at the end of April is a requirement that virtually every private employer post an 11-by-17 notice of employees' rights under the National Labor Relations Act (NLRA). A Senate bill (S. 1666) and two House bills (H.R. 2833 and 2854) also would block that posting requirement.
Congress Extends Payroll Tax Cut
Congress voted today to renew the payroll tax cut and jobless benefits. The Senate approved the $143 billion measure on a 60-36 vote minutes after the House approved it 293-132. The president was expected to sign HR 3630 today.
The legislation allows workers to continue to receive a two percentage point increase in pay and allows people out of work for more than six months to keep their jobless benefits. The bill also prevents a 27 percent cut in federal reimbursements to physicians who treat Medicare patients.
Corporate Tax Reform Part of Obama's Budget Plan
In his annual budget proposal to Congress on Monday, President Obama called for lowering the top corporate tax rate, which could help retailers create jobs. The United States has one of the highest corporate tax rates in the world, with the retail industry paying one of the highest rates of any industry group. While the president did not specify a tax rate, House Ways and Means Committee Chairman Dave Camp, R-Mich., last October proposed lowering the top rate from 35 percent to 25 percent.
However, the president's proposed $3.8 trillion budget also includes about $1.6 trillion in tax increases.