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Articles in Category: Retail Operations

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.

New Minnesota State Economist Says Growth Fundamentals Are In Place

Kalambokidis paints a picture of an economy ready to grow

The fundamentals for growth in the U.S. economy are in place for 2014 and 2015, according to Minnesota State Economist Dr. Laura Kalambokidis.

Speaking before retailers at the Minnesota Retailers Association Annual Meeting Thursday, October 24, 2013, Kalambokidis painted a picture of an economy ready to grow, but cautioned that policy uncertainty and deficits could challenge growth in Minnesota and across the nation.

During her speech, Kalambokidis made the following points related to our economy:

  • Basic fundamentals for growth in the U.S. economy are in place for 2014, 2015;
  • Minnesota's employment has recovered to pre-recession levels;
  • Currently, Minnesota employment growth exceeds the national rate;
  • Minnesota's unemployment rate is well below nation's;
  • Minnesota's per capita income exceeds U.S. level;
  • Federal actions create near-term economic uncertainties;
  • Policy uncertainty imposes costs;
  • Minnesota's labor force growth is slowing sharply;
  • In the long run, baby boomer retirements are expected to extend federal deficits;
  • U.S. real GDP growth is expected to average just 2.5 percent per year over the next 30 years, well below the 3.1 percent 20-year average prior to the recession; and
  • U.S. real GDP growth over next 30 years expected to be well below 20-year pre-reccession average.

In addition to Kalambokidis, Minnesota Senator Terri Bonoff addressed Annual Meeting attendees, thanking retailers for the jobs they provide and for their contributions to the Minnesota economy.

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