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Minnesota Retailers Report Good Crowds Thanksgiving Weekend

Retailers Remain Cautious About Holiday Spending

National reports from Thanksgiving weekend concluded traffic was up at retailers across the country, however there was a slight dip in spending--largely attributed to strong retail competition including deals and "doorbusters". The National Retail Federation reported consumers spent  $407.02 from Thanksgiving through the weekend, down from $423.55 a year ago.

In an unscientific survey of members, the Minnesota Retailers Association (MnRA) found that 55 percent of retailers saw more customers walking through their doors than anticipated, with another 30 percent seeing the level of traffic they expected.

Also in good news for Minnesota's economy, 45 percent of retailers reported more sales Thanksgiving weekend over the same period last year, along with 22 percent saying the two years were about equal.

Despite reports of strong traffic and sales, retailers in Minnesota are cautious when it comes to the economy and consumer spending around the holidays.  Fifty-five percent of retail respondents anticipate this year's holiday season sales to match last year's, and 20 percent said they anticipate sales to be less. Only 20 percent of retailers expect sales to be above the 2012 holiday season level.

Let's Make This Is The Last Holiday Shopping Season Without E-Fairness

This holiday season, small business owners in Minnesota and across the country are sending a single wish list to members of Congress

This holiday season, small business owners in Minnesota and across the country are sending a single wish list to members of Congress: close the online sales tax loophole, giving all retailers the chance to compete on a level playing field. Local employers are at a severe disadvantage to out of state online-only retailers, especially at this time of year--the busiest and most important season for small retailers.

Today, all local businesses are required to collect and remit sales taxes from customers, while many online retailers without some type of physical presence in Minnesota like Overstock and eBay are not required to do so.  While the Minnesota Legislature passed e-fairness earlier this year, out of state retailers without a presence in the state have a substantial pricing advantage against local small businesses, who cannot compete when the government essentially gives their competitors at least a 6.875 percent pricing advantage.

In September, retailers were encouraged when U.S. Representative Bob Goodlatte, chairman of the House Judiciary Committee, released 'Basic Principles on Remote Sales Tax,' which will serve as a framework for a conservative solution to finally close the online sales tax loophole. The release of these principles shows Chairman Goodlatte's strong commitment to ending the preferential tax treatment for online-only retailers at the expense of main street retailers.   While this is a positive step in the right direction, business owners are calling on Congress to take swift action by drafting legislation based on these principles and passing the bill in the U.S. House of Representatives.

"This needs to be the last holiday shopping season local retailers operate under this disadvantage in Minnesota and across the country," says Minnesota Retailers Association President Bruce Nustad. "At the state level, we have done our job to address this serious issue for retailers, now Congress needs to get e-fairness passed." 

The U.S. Senate, with leadership from Senators Amy Klobuchar and Al Franken, acted on e-fairness legislation earlier this year, when it passed the Marketplace Fairness Act by a wide, bipartisan vote, and a companion bill in the House already enjoys the support of over 60 bipartisan co-sponsors.  A recent study conducted by President Ronald Reagan's economist, Art Laffer, showed that e-fairness legislation coupled with state tax cuts would increase our nation's prosperity and employment-resulting in 1.5 million jobs in the next 10 years and creating an additional $563.2 billion in Gross Domestic Product (GDP). 

Governors, small business owners, and free market conservatives across the country have expressed their support for e-fairness legislation and agree that Congress needs to pass e-fairness legislation to give states the ability to collect these taxes online, as soon as possible.

Dirty Harry-Era Deposit Recycling Program Proposed

MPCA charged with presenting a plan to the Legislature by January 14

The same year Academy Award winner Clint Eastwood starred as a no-nonsense San Francisco cop in the 1971 movie Dirty Harry, Oregon passed the nation’s first beverage container deposit-refund law.  Forty-two years later, Minnesota is looking at a similar approach to boost recycling rates, despite the success of innovations like curbside, single sort, and voluntary retail recycling programs.

Following direction from the 2013 Legislature, the Minnesota Pollution Control Agency (MPCA) is tasked with submitting (by January 14) a plan to increase Minnesota’s beverage container recycling rate to 80 percent. In preparation for that submission, on September 16 MPCA released a draft program design for a 10 cent deposit-refund program on beverage containers, up to one gallon. 

The plan calls for the creation of massive infrastructure through non-profit administration of the program. This infrastructure may include as many as 1,100 container redemption sites across the state.

Retailers would be on the front line of the system, responsible for collecting, administering, and remitting the 10 cent per beverage container deposit. And just like with sales taxes, this would be done at the expense of the retailer with no reimbursement of training, point of sale, collection, accounting, and remittance costs. Retailers even end up paying the swipe fees on 10 cent deposits when consumers use a debit or credit card.

The proposed system stands to increase consumer prices at a time when our economy needs spending to fuel our recovery.  Consider a case of water a customer purchases on a summer day. The price of that water could double with the addition of a $2.40 deposit, even more when a retailer is forced to add administration expenses to the price. Arguably a consumer may skip that purchase, or in the case of a retailer operating in a border-state community, the consumer may elect to take the entire purchase across the border.

MPCA is currently working on an assessment of the financial impact of the proposed deposit-refund beverage container program, with a draft report due December 30.  Additionally, MPCA will perform an evaluation of Minnesota’s current recycling infrastructure before May 30. Retailers can follow the program on MPCA’s website.

788,000 jobs across Minnesota depend on the economic viability of job-producing retailers like you. The proposed deposit-refund beverage container recycling program is a decades-old approach threatening these jobs by adding expense to retailers, increasing consumer prices, and dismissing the exploration of modern day alternatives.

MnRA recently submitted comments on the proposed program.  Click here to view all the public comments.

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