BUSINESS DAY 2010
Over 400 retailers and manufacturers, members of IRMA and the Illinois Manufacturers’ Association (IMA) attended the 2010 Business Day festivities on Wednesday, May 5th. Attendees heard from Governor Patrick Quinn (D- Chicago) and his challenger in the gubernatorial race, State Senator Bill Brady (R- Bloomington). Both presented their starkly contrasting visions energetically.
Referring to members of IRMA and the IMA as the ‘heart and soul’ of Illinois’ economy, Governor Quinn laid out his vision for leading Illinois out of the economic malaise. He highlighted his push for a sales tax holiday on school supplies as an effort to stimulate the economy pointing to other states (e.g. Florida, Missouri, Wisconsin, etc.) as success stories. He lauded the recently concluded Federally-funded Energy Star ® appliance program as a success story of how these types of programs stimulate the economy noting that over 63,000 appliances were sold in Illinois on Friday, April 16th resulting in nearly $40 million in retail sales.
Stating that there are ‘movers and shakers and those who are moved and shaken and the difference between them is education’, the Governor renewed his call for an increase in the income tax to fund education as absolutely essential to moving Illinois forward.
State Senator and Republican gubernatorial candidate Bill Brady explained to the crowd his business background saying he ‘understands the business of business’. He explained that he understood there is a need for more revenue for the State but differed with the Governor on how that revenue should be obtained. Brady believes that revenue can be found through reducing and controlling spending and freeing the economy which would happen if the State would ‘deregulate, de-tax, and de-fee’. Brady stated that if ‘fees, taxes, and regulations created jobs, we [Illinois] would be the #1 job-producing State in the nation’.
Attendees spent the afternoon at the Capitol meeting with their elected officials. The day ended with the not-to-be-missed reception under the tent. This year’s theme was, fittingly enough, Cinco de Mayo complete with a mariachi band and plentiful food and drink generously provided by some of IRMA’s restaurant and grocery members. The reception once again lived up to its reputation as a ‘can’t miss’ event.
IRMA would like to thank all the members who took time away from their businesses to attend.
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SALES TAX HOLIDAY
Early last week, Governor Pat Quinn proposed a sales tax holiday on clothing and school supplies as a way to help stimulate the economy and give Illinois consumers a break during the recession.
This week, S.B. 3658 (Sen. Deanna Demuzio, D- Carlinville/Rep. Keith Farnham, D- Elgin) was amended to contain the Governor’s proposal. The holiday will run from August 6, 2010 through August 15, 2010. The State’s Use Tax of 5% will be suspended on eligible items but the 1.25% rate (that portion of the 6.25% Use Tax that goes to local governments) will still be charged. Eligible items include school supplies and clothing items. School supplies do not include items such as computers and computer supplies, PDA’s, cameras, etc. The holiday applies to clothing with a retail selling price of less than $100. Discounts can push the selling price of an item below $100 but not manufacturer coupons.
While some take a static look (i.e. it will only cost money) the experience of other states, such as Florida, demonstrate that a sales tax holiday structured like this is a net gain to the tune of tens of millions of dollars.
IRMA supported the Governor’s initiative as contained in S.B. 3658 which has passed the House and now awaits concurrence on the Senate floor after receiving bi-partisan approval in the Senate Executive Committee.
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RETAIL THEFT
Since 2005, the Criminal Law Edit, Alignment, and Reform (CLEAR) Committee has been meeting to rewrite the Illinois Criminal Code. The impetus was the fact that the Code was originally written nearly 50 years ago and needed to be re-written to make it ‘more readable, understandable, consistent, and just’. One of their recommendations included increasing the felony threshold for retail theft. As a result of an agreement between IRMA and the CLEAR Committee, S.B. 3797 (Sen. John Cullerton, D- Chicago/Rep. Lou Lang, D- Chicago) increased the threshold for felony theft from $150 to $300. However, it also allows prosecutors to aggregate any thefts that occurred within one year and those aggregated thefts can be prosecuted in any jurisdiction in which one or more of the thefts occurred. S.B. 3797 passed both chambers and now goes to the Governor for his consideration.
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ETHANOL
Many observers believe that sometime this summer, the U.S. Environmental Protection Agency will approve the sale of a higher blend of ethanol for sale as motor fuel. Currently E10 is the standard and the USEPA could approve a new blend as high as E15. However, no one knows for certain what actions the USEPA will take, how they will deal with issues of engines (e.g. which model cars can safely use higher ethanol blends), and how the new blends may or may not fit into motor fuels eligible for sale in non-attainment areas (i.e. the greater metro Chicago area and the Metro East) under the Clean Air Act. That is why IRMA and other organizations opposed efforts to move the Illinois tax credit from E10 to whatever higher blend the USEPA may approve. Additionally, opponents raised concerns about the ability of underground storage tanks, pumps, dispensers, and associated equipment to safely handle a higher blend. Without proper certification, retailers may find it impossible to obtain insurance and could lose the protections of the LUST Fund. Nevertheless, the change, contained in H.B. 4652 (Rep. John Bradley, D- Marion/Sen. Michael Frerichs, D- Champaign) received the approval of the Assembly and now goes to the Governor for his consideration.
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TELECOMMUNICATIONS REWRITE
With substantial bi-partisan support, the Assembly overwhelmingly approved legislation rewriting the State’s antiquated Telecommunications Act. The rewrite contained in S.B. 107 (Sen. Michael Bond, D- Greyslake/Rep. Kevin McCarthy, D- Orland Park), brings Illinois’ Act into the 21st Century and moves the focus off of landlines and onto broadband and wireless. Innovations in these areas are essential for the continued ability of retail to operate and remain competitive in the global economy.
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BUSINESS BONDS
For many years, pursuant to State law, the Illinois Department of Revenue (IDOR) required everyone seeking to do business in the State to file a surety bond in order for the business to obtain their Certificate of Registration. Over two decades ago, IDOR unilaterally stopped requiring businesses/people from having to file surety. During the late 1980′s/early 1990′s, much like today, the bond market was bad and securing bonds became a terribly expensive affair. It tied up significant amounts of money that could not then be invested in the business in Illinois. However, very recently, the Illinois Auditor General cited IDOR for their failure to collect bonds. In short, unless the law was changed, IDOR would have to require every business to file a surety bond.
H.B. 6359 (Rep. Carol Sente, D- Vernon Hills) addresses this problem by giving IDOR the flexibility to decide whether or not a bond is required. This change is good for anyone doing or seeking to do business in Illinois. H.B. 6359 means legitimate businesses will not have to have precious monies tied up in a bond as opposed to being used to establish/grow their business. H.B. 6359 was unanimously approved by the Senate and now goes to the Governor for his consideration.
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