Amicus Brief Filed with US Supreme Court in Wayfair v. South Dakota

 FOR IMMEDIATE RELEASE                                                                                                          CONTACT:

March 6, 2018                                                                                                                                  Julie Larsen, 847-946-9332

julie@macstrategiesgroup.com

                             

Amicus Brief Filed with US Supreme Court in Wayfair v. South Dakota

Filing Seeks Fairness in the Collection of Sales Tax by All Retailers

 

The Illinois Retail Merchants Association (IRMA) issued the following statement from Rob Karr, president & CEO, regarding the filing of an amicus curiae brief with the United States Supreme Court in the case of Wayfair v. South Dakota by the Council of State Retail Associations, of which IRMA is a member and Mr. Karr is Vice-Chairman. Specifically, the brief requests the U.S. Supreme Court to revisit their decision in Quill Corp. v. North Dakota absolving retailers with no physical presence from collecting state sales tax.

“It has been over 25 years since the Quill decision and much has changed in our economy since 1992. The internet was in its infancy and consumers were still making more of their purchases in stores, not by clicking a link on their smartphone. Regardless of where a sale occurs, a sale is a sale, and sales tax should be applied to every sale made to an Illinois consumer. Main Street retailers – that employ your neighbors, pay property tax, and support the little league team and high school band – should be on a level playing field with out-of-state retailers that use our roads and landfills but do not have to collect the sales tax that is used to pay for this infrastructure. It is estimated that Illinois loses over $200 million in sales tax each year to remote sales where sales tax is owed but not collected. These are revenues that could be used to stabilize Illinois’ fiscal situation.

“IRMA is pleased the United States Supreme Court is revisiting the Quill decision by agreeing to hear the Wayfair case. We urge the United States Supreme Court to overturn Quill and recognize the global economy in which we live. Overturning Quill will reinstate some equity into our economy rather than continuing to reward companies with an unfair advantage as they compete with Illinois businesses while contributing nothing to Illinois’ economy.”

Tim Lehan, Chairman of the IRMA Board of Directors and a pharmacist and owner of Lehan Drugs said, “As a Main Street retailer with locations in DeKalb, Sycamore and Rockford, I can tell you that my commitment is to the communities we serve. I believe that the Supreme Court has an opportunity to level the playing field for me, and other retailers like me, who have been at a disadvantage compared to internet retailers who aren’t required to collect sales tax.” Lehan expressed his hope for the Supreme Court to reconsider its outdated decision.

About the Illinois Retail Merchants Association (IRMA)

One of the largest state retail organizations in the United States, IRMA serves as the voice of retailing and the business community in state government. Founded in 1957, IRMA represents more than 20,000 stores of all sizes and merchandise lines. From the nation’s largest retailers to independent businesses in every corner of the State, merchants count on IRMA to fight for the best possible environment in which to do business in Illinois.

 

 

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Retailers File Temporary Restraining Order and Preliminary Injunction to Block Cook County’s Sweetened Beverage Tax

FOR IMMEDIATE RELEASE CONTACT:
June 27, 2017

CONTACT

Ryan McLaughlin, 312-969-0255
ryan@macstrategiesgroup.com

Retailers File Temporary Restraining Order and Preliminary Injunction to Block Cook County’s Sweetened Beverage Tax

Vague regulations and policy’s lack of uniformity violate the state’s constitution

SPRINGFIELD – Today, the Illinois Retail Merchants Association, on behalf of Cook County retailers, filed a temporary restraining order and is seeking a preliminary injunction in the Cook County Circuit Court challenging the sweetened beverage tax saying it violates the uniformity clause of the Illinois Constitution and is impermissibly vague. The ordinance is designed to place a penny-per-ounce tax on sweetened beverages and is poised to go into effect in only a matter of days on Saturday, July 1st. The lawsuit was filed by the law firm of Horwood Marcus & Berk who specialize in state and local tax as well as business and finance law.

The sweetened beverage tax creates classifications of taxable sweetened beverages that violate the uniformity clause of the state’s constitution, which requires taxing bodies to draw reasonable classes of taxable categories and imposes a uniform tax within the classes. Specifically, the ordinance taxes ready-to-drink, pre-made sweetened beverages, but generally excludes sweetened beverages made on demand. Not only are these sweetened beverages the same other than how they are served, but when considering the purpose of the ordinance, to promote public health and decrease obesity rates, the classification bears no reasonable relationship to accomplishing those goals. The argument can be made that Cook County has failed to meet the minimum standards in creating classes of taxable sweetened beverages.

Example of a violation of the uniformity clause:
A ready-to-drink sweetened iced tea served out of a chilled beverage urn is taxable, but a sweetened iced tea that is shaken behind the counter before giving it to the customer is not taxable. The beverages are substantially similar, except for the “shake” before giving it to the customer.

Additionally, the ordinance is impermissibly vague and fails to provide precise application under the circumstances it is intended to operate, creating a burden on retailers to accurately calculate the proper amount of tax.

Example of vagueness in the ordinance:
A retailer is responsible for collecting the Sweetened Beverage Tax for fountain sodas based on the amount it will sell in a certain-sized cup. In practice, however, by adding ice, the retailer is actually serving less sweetened beverage than the tax which was collected from the customer. A similar problem is possible in the refill context when the tax could be under-collected based on additional ounces consumed, with either scenario leaving the retailer legally exposed in an untenable situation.

Causing further complication, there has been an unavailability of guidance on the issue with the County changing the rules just days before the tax goes into effect making it impossible for retailers to properly implement in such quick order.

Ever-changing rules for SNAP may result in retailers being pushed out of program
SNAP does not allow a state or local unit of government to collect local sales taxes on purchases made under this program. Many retailers may not be able to correctly charge the Sweetened Beverage Tax, especially since the rules have been changed approximately two weeks prior to the date retailers must begin collecting the tax. If retailers do not comply they might be in jeopardy violating the terms of their SNAP contracts. In some cases, SNAP represents a significant portion of their business.

“As it stands, this ordinance is incomplete and it’s a perfect example of the disaster that awaits when policies are hurried through without serious thought to how they might impact the businesses that have to try to comply with these policies. To implement this tax correctly by the July 1 deadline is inconceivable with rules and regulations that are so poorly defined and continually changing. If enacted, Cook County retailers would be unfairly exposed to lawsuits for failure to comply and that’s a situation we’re not willing to accept for the retailers in Cook County,” said Rob Karr, president and CEO of IRMA.

Retailers are urging the court to block implementation of the ordinance due to the lack of clarity in how to properly apply and administer the tax and its unequal application.

 

About the Illinois Retail Merchants Association (IRMA)
One of the largest state retail organizations in the United States, IRMA serves as the voice of retailing and the business community in state government. Founded in 1957, IRMA represents more than 20,000 stores of all sizes and merchandise lines. From the nation’s largest retailers to independent businesses in every corner of the State, merchants count on IRMA to fight for the best possible environment in which to do business in Illinois.
About Horwood, Marcus & Berk
Horwood Marcus & Berk is a Chicago law firm that represents a wide range of clients from Fortune 500 corporations, to mid-sized and closely-held companies. While serving a number of different industries, the firm is specializing in state and local tax as well as business and finance law. In recent years, the firm has fought on the side of retailers in Qui tam lawsuits, which whistleblowers have used to unfairly target companies under the False Claims Act.

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BUSINESS GROUPS LABEL 2017 SESSION “ONE OF THE WORST FOR EMPLOYERS”

FOR IMMEDIATE RELEASE

May 31, 2017

CONTACT:

Ryan McLaughlin, 312-969-0255 | ryan@macstrategiesgroup.com

Rachel Peabody, 217-753-1761 | rachel@macstrategiesgroup.com

BUSINESS GROUPS LABEL 2017 SESSION “ONE OF THE WORST FOR EMPLOYERS”

Litany of anti-employer, job-killing measures rock employers

 

SPRINGFIELD – The state’s premier business groups have labeled the spring legislative session as “one of the worst for employers”, citing lawmaker’s apparent “race to the bottom” and litany of anti-employer, anti-job growth measures considered this year.

At a press conference on the final day of session, the Illinois Manufacturers’ Association, Illinois Retail Merchants Association, Chicagoland Chamber of Commerce, Illinois Chamber of Commerce and NFIB joined together lamenting the continuous effort to tax, over-regulate, mandate and constrict employers at every turn by lawmakers in both chambers which has created one of the most crushing business climates in the nation. While this is not a new phenomenon in Springfield, the massive uptick in these anti-employer measures coupled with the accompanying rhetoric has exasperated an already hostile business climate.

Ironically, many of these measures – in theory – are aimed at increasing pay, hiring more employees or giving workers more certainty, yet they achieve quite the opposite. While the intention of our business community is to provide jobs with competitive pay and generate revenue to fix the state’s problems, the anti-employer narrative is having a chilling effect.

“My Democrat friends like to say we are in a race to the bottom. Unfortunately, I’m here to tell you we are winning but that means Illinois businesses and families are losing. The high cost of workers’ compensation is one of the biggest issues facing manufacturers but lawmakers fail to act because they continually side with wealthy trial lawyers. Their failure to act and create an attractive economic climate means that Illinois will continue to bleed jobs and remain a laughingstock of the nation,” said Greg Baise, president and CEO, Illinois Manufacturers’ Association.

“Every day seems to bring another report of another round of retail store closings. Instead of talking restraint and recovery for the retail community, the narrative out of Springfield, like the actual actions in Chicago and Cook County, is higher taxes, labor and regulatory burdens, and, in the case of Cook County, incentivizing theft. This ‘campaign against Main Street retailers’ will only hasten the continued job loss and store closings that have become all too familiar. Retailers have limited responses; reduce employee hours, lay people off, increase automation, or close. Passing legislation to mandate artificially higher wages when the jobs don’t exist doesn’t help anyone,” said Rob Karr, president and CEO, Illinois Retail Merchants Association.

“The ping pong of anti-employer policies coming from both Chicago and Springfield is unsustainable. At every corner, Chicagoland businesses are being asked to pay higher property taxes, soda taxes, and sales taxes while also being forced to implement countless mandates that do not grow the economy. Chicago has so much to offer but this economic death by 1,000 paper cuts does not create the jobs, quality of life and revenue Springfield should be seeking,” said Michael Reever, Vice President of Government Affairs, Chicagoland Chamber of Commerce.

“Time and again lawmakers have suggested policies that shift greater financial burdens to employers statewide. Whether it is during the budget impasse or after it is resolved, standing up against job-crushing legislation is crucial for our economy. Increasing minimum wage, passing “fake” workers’ compensation reform and proposing a significant arbitrary tax increase is far from the progress Illinois deserves. We need pro-growth economic policies to prevent the steady decline of Illinois’ economic competitiveness. And we need them now, that is, if we want to continue to attract the best and the brightest individuals to Illinois,” said Todd Maisch, President and CEO, Illinois Chamber of Commerce

“Our members aren’t surprised by the legislature’s anti-business antics this session, but they are disappointed and fed up. Illinois is broke and we haven’t had a budget in two years. We need leaders who are less focused on scoring easy political points and more on enacting good policies that benefit all Illinoisans. We need legislators who will act like adults, set aside their political differences, and make the difficult decisions that would make things better for working families and allow businesses to grow and create jobs,” said Mark Grant, Illinois State Director, NFIB

Springfield’s Dirty Dozen

  1. SB 81: Legislation that raises the minimum wage to $15
  2. HB 2771: A costly government mandate forcing employers regardless of size to provide paid leave to every employee regardless of hours worked.
  3. HB 160: A $5,000 fee on every employer for the “privilege” of doing business in Illinois
  4. HB 156: Massive property tax shift onto commercial and industrial taxpayers
  5. SB 1502: Trial lawyer supported legislation that burdens every e-commerce business, and every company with a credit card, loyalty program app or website, without providing any consumer protections
  6. HB 3449: Trial lawyer supported legislation that unfairly targets companies that share or store location data and requires ecommerce businesses to ask for permission before collecting location data from your device
  7. HB 3538: Penalizes business that move even one job out of state while discouraging future investment
  8. HB 2802: Government mandate forcing businesses to pay the transportation costs of their workers
  9. HB 2525: This bill codifies “a cause” workers’ compensation standard that mandates insurance rate review without providing any meaningful reform
  10. HB 2622: Legislation that would disrupt the private workers’ compensation insurance market without having a strong reason to exist
  11. HB 3337: A bill that allows someone to steal $2,000 of merchandise from a retailer
  12. SB 9: Imposes $5.4 billion in new taxes on Illinois businesses and families – *revenue without reforms

Ignored Reforms of the 2017 Legislative Session

  • Pension reform
  • Workers’ compensation reform
  • Tax reform
  • Restraint of local government
  • Property tax relief
  • Education and workforce development

 

About the Illinois Manufacturers’ Association (IMA)

The Illinois Manufacturers’ Association is the only statewide association dedicated exclusively to advocating, promoting and strengthening the manufacturing sector in Illinois.  The IMA is the oldest and largest state manufacturing trade association in the United States, representing nearly 4,000 companies and facilities.

About The Illinois Retail Merchants Association (IRMA)

One of the largest state retail organizations in the United States, IRMA serves as the voice of retailing and the business community in state government. Founded in 1957, IRMA represents more than 23,000 stores of all sizes and merchandise lines. From the nation’s largest retailers to independent businesses in every corner of the State, merchants count on IRMA to fight for the best possible environment in which to do business in Illinois.

About the Chicagoland Chamber of Commerce

The Chicagoland Chamber of Commerce represents over 1,000 member companies, their 400,000 employees, and over $24 billion in revenue. We combine the power of our membership with our legacy of leadership and business advocacy to drive a dynamic economy. We focus on delivering value for our members, making Chicagoland a world-class place to live and work. Visit ChicagolandChamber.org

About the Illinois Chamber of Commerce

The Illinois Chamber of Commerce has been the unifying voice for Illinois business since 1919. The Chamber advocates prosperity and a pro-business climate in Illinois. www.ILChamber.org

About the National Federation of Independent Business (NFIB) Illinois

The National Federation of Independent Business (NFIB) Illinois is a chapter of America’s leading small business association, promoting and protecting the right of our members to own, operate and grow their businesses. NFIB represents 325,000 small businesses in all 50 states and Washington, D.C., and is dedicated to leveling the playing field with Big Business, Big Government, and Big Labor in every key area – taxes, healthcare, regulations, and more.

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IRMA Responds to House Passage of the Minimum Wage Bill

May 30, 2017

  CONTACT

Rachel Peabody, 217-753-1761 | rachel@macstrategiesgroup.com

Ryan McLaughlin, 312-969-0255 | ryan@macstrategiesgroup.com

IRMA Responds to House Passage of the Minimum Wage Bill  

SPRINGFIELD – The Illinois Retail Merchants Association (IRMA) issued the following statement regarding the passing of the minimum wage bill out of the Illinois House that seeks to increase the minimum wage in Illinois to $15.00 per hour by 2022.
“The political campaign to raise the minimum wage to $15 per hour has already resulted in reduced hours and eliminated positions in major cities where this has been enacted, including the City of Chicago. In fact, we have seen automation and self-service alternatives replace jobs due to continued efforts to artificially increase wages through government actions instead of working with employers. Quite simply, the state cannot bear another proposal that eliminates what little opportunity exists in Illinois. We urge lawmakers to show more restraint when making decisions that significantly impacts a businesses’ bottom line.”

Facts about the minimum wage:

  • Illinois’ minimum wage is already the highest in the Midwest. Illinois is poised to add another anti-competitive burden to retailers’ ability to compete with retailers in border states.
  • Raising the minimum wage will continue to keep people, especially teens, out of jobs. According to a January 2016 report from the University of Illinois at Chicago’s Great Cities Institute, only 12.4 percent of African Americans, 15 percent of Hispanic or Latinos and 24.4 percent of Whites (non-Hispanic or Latinos), ages 16 to 19 years old, are employed in Chicago. This destroys what little opportunity exists.
  • Minimum wage salaries are a floor, not a ceiling. Workers are not locked into minimum wage jobs, they have the ability to garner the necessary skills to advance and earn higher wages. Retail ranks are filled with those who started in minimum wage jobs.
  • Penalizes brick-and-mortar retailers over internet retailers. The minimum wage hike will not impact internet retailers, but penalize those retailers that invest in a physical property, workforce, pay property and sales taxes, etc.

 

About The Illinois Retail Merchants Association (IRMA)
One of the largest state retail organizations in the United States, IRMA serves as the voice of retailing and the business community in state government. Founded in 1957, IRMA represents more than 23,000 stores of all sizes and merchandise lines. From the nation’s largest retailers to independent businesses in every corner of the State, merchants count on IRMA to fight for the best possible environment in which to do business in Illinois.

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IRMA Announces New Executive Vice PResident of Development

FOR IMMEDIATE RELEASE                                                                                                

February 1, 2019

CONTACT: Ryan McLaughlin, 312-969-0255, ryan@macstrategiesgroup.com

IRMA ANNOUNCES NEW EXECUTIVE VICE PRESIDENT OF DEVELOPMENT

SPRINGFIELD – The Illinois Retail Merchants Association (IRMA), which represents over 20,000 retail stores across the state of all sizes and types including chains and family-owned and operated stores as well as pharmacy, grocery, hardware and restaurants, announced today that Gary Lukovich has joined the association as the new Executive Vice President of Development.

Lukovich most recently served as the corporate vice president for Homeowners Choice insurance company where he orchestrated a company-wide plan to enter nine new state markets. With a background in health/life and property/casualty insurance, as well as financial and banking services, Lukovich has a had a long career of creating business growth through sales, marketing and staffing and he has managed multi-million dollar budgets and workforces with as many as 25,000 professionals.

In this new role, Lukovich will be responsible for driving membership growth and ensuring IRMA’s services reach the widest breadth of retailers in Illinois as the industry continues to expand and change.

“Gary’s wealth of experience in expanding sales operations as well as developing marketing and recruitment systems makes him excellent fit to drive membership and program operations at IRMA. As the leading organization representing retailers of all types and sizes across the state, we touch many different workers and are a driving force in state revenue. Gary brings a unique skill set to reach more retailers as the industry continues to evolve,” said Rob Karr, president & CEO, IRMA.

 

About The Illinois Retail Merchants Association (IRMA)

One of the largest state retail organizations in the United States, IRMA serves as the voice of retailing and the business community in state government. Founded in 1957, IRMA represents more than 23,000 stores of all sizes and merchandise lines. From the nation’s largest retailers to independent businesses in every corner of the State, merchants count on IRMA to fight for the best possible environment in which to do business in Illinois.

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This Week in Springfield – 101-03

101-03
February 8, 2019

This Week in Springfield, the Senate passed a $15 wage and the Senate Public Health Committee passed a Tobacco 21 measure.

$15 STARTING WAGE

Despite concerns by suburban and downstate legislators in particular over the impact on the state budget (over $1 billion) and the impact on suburban and downstate employers, the Senate passed a proposal to increase the Illinois starting wage to $15 over 5 years as contained in Senate Amendment #1 to Senate Bill 1 (Sen Kimberly Lightford, D- Westchester). The 39-18 vote was along strictly partisan lines and came only after Governor JB Pritzker spent 30-minutes in the Senate Democratic caucus imploring a united front for his first major policy initiative. This action comes despite two very reasonable alternatives put forward by IRMA under the belief that an increase is inevitable, everyone was genuine in their desire to turn the page on the last four-years and seek genuine compromise, and the two alternatives IRMA put forward were supported in those respective states by the same proponents who are pushing the $15 wage increase in Illinois.

IRMA first suggested following the Oregon model where a different wage would be paid in different parts of the state. For example, $15 would be paid in Chicago, a lower wage in the collar counties, and a yet lower wage downstate. The Oregon model makes the most sense for a state as economically and geographically diverse as Illinois in that no other location in Illinois enjoys the economic benefits of Chicago. Nowhere else has over 55 million tourists per year, nowhere else has millions commuting into the city center every day spending money, nowhere else has the concentration of business headquarters, and nowhere else has the concentration of wealth. However, several legislators and the Governor’s Office expressed reservations over voting for $15 for some parts of the state but not others.

As an alternative, IRMA put forward the New York model. New York increased the starting wage in New York City over 4 years. The starting wage in the two counties on Long Island and Westchester County were increased to $15 over 6 years, and the starting wage in the rest of New York over 10-12 years (increased by CPI until reaches 15). While less sensitive to the economic diversity of New York and Illinois, it is an apt example for Illinois. The city of Chicago began increasing its minimum wage in 2015. If SB 1 is enacted as is, employers in the city of Chicago will have been given 10 years to get to $15 per hour. Employers in the suburbs and downstate will only be given 5 years. It raises the question as to why suburban and downstate employers are not being given the same consideration as employers in the city of Chicago. For those who say ‘well, the city raised the wage on its own, the answer is proponents don’t get it both ways. They can’t oppose preemption and then not count the actions of the city of Chicago. Employers don’t get that luxury.

Claims that alternatives were never presented are simply false. These alternatives were provided to the Governor directly the evening of Tuesday, January 29th, the primary legislative sponsors and the proponents during a morning meeting on Thursday, January 31st, repeated during another meeting the morning of Tuesday, February 5th and shared with other legislators and legislative staff throughout the week. Clearly, given the facts noted above, there does not appear to be a genuine desire for what would otherwise be considered an easily achievable compromise.

The proponents claim that a tax credit inserted into the bill will help small business. In fact, the tax credit as proposed is inadequate to soften the size and pace of the proposed increase and applies to very few employers. The following would NOT receive the credit:

• Any employer with more than 50 full-time equivalent employees. The legislation does not state what constitutes ‘full-time” so it is impossible to accurately calculate. However, given the fact the proposal started with a firm cap at 50, we can expect a definition that keeps close to that number.

• If you are a franchisee and have more than one store OR file as part of a unitary group (e.g. you are a franchisee, run some other type of business and they file taxes together) you would not be eligible for the tax credit.

• If your average wages paid are less than the same quarter the year before, you are not eligible for the credit. For example, if you are forced to cut hours worked, lay off workers, or if workers are absent, your average wages could easily drop.

• Employers with 5 or fewer employees are eligible for a credit for a year longer than everyone else. While the proponents claim this applies to 48% of all employers, they don’t tell you that the vast majority of that 48% is comprised of employers where the only employee is the employer. According to the Illinois Department of Employment Security (IDES), in the City of Chicago, such businesses account for 6.6% of employers. According to the US Small Business Administration, 80% of all employers fall into this category. Therefore, 1.4% – 2.0% of employers in Illinois would qualify.

Clearly, the tax credit is nothing more than a talking point.

As passed by the Senate, SB 1 increases the starting wage as follows:

18 years and older                     Under 18 years of age*

YEAR              WAGE                      YEAR            WAGE
1/1/2020       $9.25                    1/1/2020        $8.00
7/1/2020       $10.00                  7/1/2020
1/1/2021       $11.00                                         $8.50
1/1/2022       $12.00                                         $9.25
1/1/2023       $13.00                                        $10.50
1/1/2024       $14.00                                        $12.00
1/1/2025       $15.00                                        $13.00

*If the employee who is under 18 years of age works more than 650 hours for the employer during a calendar year, then the employer must pay the full minimum wage regardless of the employee’s age.

While it looks like a six-year phase-in, it is really a five-year phase in because employers will experience a $2.75 per hour increase (33.3% increase) in the first 366-days. For an employer’s planning purposes, a year-and-one-day, is not two years. This phase-in is an average annual increase to an employer’s largest or second-largest line-item of over 16% per year for a total increase of 81.8% over 5 years.

The House Labor & Commerce Committee is scheduled to consider SB 1 on Wednesday, February 13th at 2:00 p.m. IRMA members should register their opposition by filing a slip at this link. Additionally, IRMA members are encouraged to continue to register their opposition per the action alerts IRMA has distributed.

TOBACCO 21

SB 21 (Sen. Julie Morrison, D-Deerfield) prohibits an Illinois licensed retailer from selling tobacco products to anyone below the age of 21, but removes the penalties for the purchase, possession, selling, or consumption of tobacco for the same individuals. It completely removes the specific prohibition of the possession of tobacco products by a minor. And it only prohibits a minor from selling tobacco products, as an employee, at a licensed retailer. In fact, the only thing SB 21penalizes a minor for is using a fraudulent identification.

As a result, since the Illinois statutes would no longer penalize a minor for any of the aforementioned, SB 21 makes it “legal” for a person under the age of 21 to: (1) possess tobacco, (2) consume tobacco, (3) sell tobacco, (4) buy tobacco from an unlicensed Illinois retailer or individual, or (5) buy tobacco from a licensed out-of-state retailer or online. As such, the bill protects unlicensed, unregulated, and, untaxed individuals selling tobacco to minors while prohibiting licensed Illinois retailers from selling tobacco products to anyone below the age of 21.

SB 21 passed the Senate Public Health Committee by a partisan vote of 8-4.

BILL INTRODUCTIONS

The Illinois General Assembly has introduced nearly 4,000 bills to date. With the bill filing deadline of February 15th quickly approach, there will likely be a large number of bills filed next week. Here are a sample of bills that were filed this week:

Check out Bag TaxSB 1240 (Sen. Terry Link, D-Gurnee) creates the Checkout Bag Tax Act and imposes a tax of $0.07 on each checkout bag used by a customer at a retail establishment in the State. The proceeds from the tax shall be distributed as follows: (1) the retailer shall retain $0.02 per bag; (2) $0.02 per bag shall be distributed to the General Revenue Fund; and (3) $0.03 per bag shall be deposited into the Checkout Bag Tax Fund.

The $.03 from in the Checkout Bag Tax Fund is then distributed to municipalities to use for funding the collection of household hazardous waste such as needles, paint, batteries and other common items such as mattresses, plastic bags, auxiliary containers, etc. Municipalities that do not already have a plastic bag ban or tax would be prohibited from instituting a ban or Chicago, Oak Park, and Evanston would be able to keep their current ordinances but could not change them unless to make them consistent with the proposed state law.

Retail DiscountHB 2079 (Rep. Will Guzzardi, D-Chicago) and SB 1132 (Sen. Omar Aquino, D-Chicago) reduces the reimbursement that is provided to retailers for collecting sales taxes on behalf of the state. It caps the amount at $1,000 per retailer per year. Unknown to most people, retailers are responsible for interpreting, administering, collecting, and remitting the occupation and use taxes also known as the sales tax. In return for the expenses that they incur during this process, retailers are allowed to retain 1.75 percent of the sales tax they collect. This is known as the retail discount. This allowance serves as a partial reimbursement. If retailers were to be fully reimbursed for their costs, independent studies conclusively demonstrate the allowance would have to be nearly 4 percent. The Illinois Department of Revenue (IDOR) retains 2 percent of the monies they collect on behalf of local governments. Additionally, while retailers subsidize the state retail sales tax collection, retailers are paying between 1.5% and 3%, plus $.10 of the sales tax directly to the banks in credit card fees. If 50% of their sales are on credit cards, that means an amount equal to between ¾% and 1.32% is paid in credit card fees on the retailer’s entire universe of sales tax collections. Therefore, credit card fees alone erase all or most of any retailer’s partial reimbursement. While IRMA is not asking that this allowance be increased, we adamantly oppose any effort to reduce or eliminate the existing allowance.

Food AllergenHB 2123 (Rep. Jonathan Carroll, D-Northbrook) requires sesame to be labeled in any food product containing sesame. It is unclear whether the bill refers to packaged food or to prepared food. Food allergen labeling is governed by the federal Food Allergen Labeling and Consumer Protection Act (FALCPA). FALCPA keeps food allergen labeling consistent in all 50 states. As drafted, this legislation would require a different Illinois specific label for any food containing sesame sold in Illinois.

This Week in Springfield – 101-02

February 1, 2019

This Week in Springfield the minimum wage debate began in earnest.

$15 STARTING WAGE

An effort to increase Illinois’s starting wage to $15 has gained early traction driven by the desire of Governor J.B. Pritzker to achieve passage sooner rather than later. TWIS readers will recall that the Governor made a $15 starting wage one of the cornerstones of his campaign.

Wednesday, during a subject matter hearing of the Senate Labor Committee, IRMA testified on the subject. It was noted that while IRMA is philosophically opposed to artificially imposed starting wages, we recognize that an increase is going to occur.

Proponents have noted that $15 starting wages in places like Seattle have not apparently led to significant job loss although research does point to lost hours particularly for low or unskilled workers. However, as even pro-wage increase researchers have noted, no one knows what the impact will be outside of urban centers like Seattle, New York City or Chicago and you cannot assume the experiences of a thriving city center will be the same experiences elsewhere as there are major economic differences. IRMA noted that the suburbs and downstate do not enjoy the concentration of economic dynamics that such urban centers enjoy. For example, Chicago benefits from robust tourism, a concentration of business headquarters, the daily influx of millions who spend money, and a concentration of wealth. No other location in Illinois even comes close to enjoying that combination of benefits.

IRMA also pointed to states like Oregon and New York that appeared to recognize such differences and took geographic-based approaches to increasing their starting wages.

In Oregon, the starting wages are higher in the Portland metro area, somewhat lower in their suburbs, and then even lower in the rest of the state. This is an approach that recognizes the substantial cost-of-living differences. It also recognizes the substantial differences that will occur between Illinois and every border state. With retail increasingly able to serve consumers regardless of where they are located, and 2/3rds of Illinois’ population within a 40-minute drive of a border, those disparities will have impact on employers.

New York increased the starting wage to $15 quickly in New York City, a bit more slowly in Long Island and Westchester County, and much more slowly in the rest of the state. In both cases, the increase to $15 started at a much higher rate in New York City. Similarly, Chicago will be at $13 July 1st while Cook County will be at $12. That is a significantly different starting point than the rest of Illinois which is currently at $8.25. A phase-in such as five years for the City of Chicago and Cook County, seven years for the collar counties and 10 years for the rest of the state is more realistic but will still be a large cost item for employers.

Even if the Illinois starting wages were increased from $8.25 to $15 over a 10-year period, the average annual increase would be just over 6% to the largest or single largest expense item of retail employers. That is why the tax credit currently proposed by the advocates to soften the blow on smaller employers is inadequate if policy makers insist on not taking an Oregon-like approach. First, the tax credit as currently proposed, only applies to employers with fewer than 50 employees at all locations. As IRMA noted, a single retail store can have more than 50 employees. Second, it treats franchisees as if they are owned by the franchisor. Franchisees are, in fact, small businesses so this inequality must be repaired. Third, the tax credit itself is not robust enough.

Additionally, the Illinois probationary/training wage allows employers to pay a trainee $0.50 less per hour than the current minimum wage. That was not very adequate at $8.25 but it is wholly inadequate at $15.00. The probationary/training wage needs to be in the neighborhood of $2.00 per hour less for the 90-day probationary/training period if employers are going to have any incentive to take the risk of hiring no-or-low-skilled employees.

While there are other issues, these are the primary issues under discussion. Additional considerations exist about impact on taxpayers. At $15, the State budget will be negatively impacted a few hundred million annually not to mention at least that kind of impact on local governments, higher education institutions, K-12 schools, park districts, etc.

IRMA will keep you posted as developments warrant.

 

New Year, New Laws | Top Retail Laws Going into Effect January 1

SB 2577, Main Street Fairness  

SB 2577 requires online retailers to collect sales taxes on purchases made in Illinois.  The bill was modeled after the South Dakota law that was upheld by the United States Supreme Court.  Specifically, SB 2577 provides that if a retailer or serviceman makes a sale to purchaser in Illinois from outside of Illinois, then that retailer or serviceman is considered to be “maintaining a place of business in this State” if (1) the cumulative gross receipts from sales of service to purchasers in Illinois are $150,000 or more; or (2) the retailer or serviceman enters into 200 or more separate transactions for sales of service to purchasers in Illinois.

 

PA 100-1003, Nursing Mother’s Act

PA 100-1003 (HB 1595) requires an employer to provide for reasonable break time during the first year after the child’s birth each time the employee needs to express milk. The break time may run concurrently with any break time already provided to the employee. An employer may not reduce an employee’s compensation for time used for the purpose of expressing milk or nursing a baby. An employer shall provide reasonable break time as needed by the employee unless to do so would create an undue hardship as defined by the Illinois Human Rights Act.

 

PA 100-1094, Employee Expenses

PA 100-1094 (SB 2999) requires an employer to reimburse an employee for all necessary expenditures or losses incurred by the employee directly related to services performed for the employer. “Necessary expenses” include all reasonable expenditures or losses including, but not limited to, uniforms, equipment, vehicle expenses, electronic devices such as cell phones, tablets, and computers, and any other expenditures or losses an employer requires an employee to incur in direct consequence of the discharge of employment duties. An employer is not liable under this Section unless the employer knew or had reason to know that the employee incurred the expenditure or loss.

 

PA 100-0954, Food Service Sanitation Managers Certification (FSSMC)

PA 100-0954 (HB 5011) grandfathers the Food Service Sanitation Manager Certificates (FSSMC) that were approved prior to last year’s passage of the legislation that removed the redundant state certification and fee on food retailers.  Last year, IRMA convinced lawmakers to remove the redundant state food certification and accompanying unnecessary fee on food retailers.  The Illinois Department of Public Health (IDPH) complied but has refused to acknowledge the expiration date of current FSSM certificates. This has required some employees to retake the federal tests before the expiration of the current 5 year certificates.  HB 5011 grandfathers those FSSM certificates approved before the change in the law.

4 Independent Illinois Retailers to Check Out for Thoughtful Gift Ideas

With 19 days until Christmas, many shoppers are feeling the pressure to find the perfect present for everyone on their list. Finding special gifts for each loved one seems to be a more complicated task year-after-year. You purchased the “must have” tech item; got them a sweater; wrapped countless socks and the ties; and suddenly this year, you have run out of ideas. The good news is, you’re not alone! The stress to find “unique” gifts is a shared sentiment among many holiday shoppers. The Illinois Retail Merchants Association is here to suggest four outstanding independent retailers located throughout Illinois who will help find gifts catered to the interests of every person on your list as well as some last minute holiday décor for yourself. Happy shopping!

Good’s Furniture

200 N Main St, Kewanee, IL 61443

Good’s Furniture offers an unforgettable voyage through 12 historic, multi-level buildings spanning three city blocks. A journey that is filled with infinite home improvement ideas stemming from hundreds of inspiring displays that showcase over 50 lines of America’s finest furniture makers. Beyond all the furniture and home decor, Good’s has it’s very own Bavarian Wine Cellar Restaurant where homemade dishes are paired with fine wines and craft beer; a European Style Bed & Breakfast awaits the weary eyed for much needed R&R; an expansive Market Square features clothing, jewelry, handbags, candles and locally made goods. No matter where your gift recipients are in life, Good’s carries an inordinate amount of furniture and home décor to match their style and needs. Not only is Good’s Furniture a retailer who will fit the needs of so many on your shopping list, but the perfect getaway for YOU!

 

Roselle Ace Hardware

821 E Nerge Rd, Roselle, IL 60172

Roselle Ace Hardware is more than your neighborhood handy store. With a wide variety of products, there is something for everyone on your list. Say goodbye to generic giftcards and socks, Roselle Ace Hardware can help you find gifts that target the passions of your loved ones. The shop’s friendly staff can help you find the perfect gift for the handyman, DIYer, foodies, holiday-lover and even those tough to buy for Grinches. For those that hate the snow, give a gift that is actually practical and adored!  Help them prepare for the weather with a creative “winter prep gift basket” that includes ice melter, a car snow scrapper, windshield wiper fluid, and a brand new shovel. For the foodie, consider a deluxe pizza oven or electric smoker. Roselle Ace has even added some surprise lines like the new Toy Department and women’s winter fashion accessories. If you’re still competing to have the best light display on the block, Roselle Ace Hardware has you covered. Focused on offering season-long, low pricing on the holiday mainstays like trees, wreaths, lights and décor, the shop carries unique product lines like the Griswald Christmas Vacation line of ultra-bright LEDs and Illuminet’s line of wirelessly syncing lights and outdoor décor.

Platt Hill Nursery

222 W Lake St, Bloomingdale, IL 60108 | 2400 Randall Rd, Carpentersville, IL 60110

A well-established nursery, popular in the spring and summer, Platt Hill Nursery continues to flourish during the holiday season. The Nursery turns their plant expertise towards Christmas trees, wreaths, poinsettias and a variety of other fresh cut holiday greenery. Platt Hill Nursery works with its vendors to get the latest harvested trees to ensure freshness through the Christmas season. Customers come from around the Chicagoland area to get custom made wreaths and live evergreen pots. Their talented artisans have been making unique evergreen displays for over 30 years and will customize the design for any individual requests making them the perfect unique gift for family, friends, coworkers, teachers, and more!  Additionally, the inside of Platt Hill Nursery transforms into a Christmas wonderland with a variety of unique holiday gifts including holiday decorations, ornaments and Christmas tree lights, and other home décor. This retailer is a must see during the holiday season!

American Sale

Click here for locations

Originally founded as a toy store in 1959, American Sale has evolved to display a great selection of patio furniture, hot tubs, above ground pools, grills, billiard tables, backyard playsets and of course, Chicagoland’s largest selection of artificial Christmas trees and holiday décor. While summer shoppers visiting an American Sale may be less familiar with this holiday shopping destination, many long-time holiday customers consider American Sale to be a Christmas destination first and foremost.

Looking to “Spruce” up your home in the days ticking till Christmas? Their showroom floor carries over 180 trees on display and thousands of holiday décor items. Plus, their knowledgeable Tree Experts are always on hand to help you bring your holiday vision to life! And with 9 locations around Chicagoland, American Sale surely is the Christmas store just for you! American Sale is also the perfect spot for unforgettable group gifts. Whether you’re splitting a gift for parents, families, or others, American Sale has their interest covered. From game room must-haves, outdoor essentials like fire pits and patio upgrades to big backyard toys, like pools, trampolines and swing sets, all the most unforgettable – and enjoyable– gifts can be found at American Sale.