IRMA’s Top Legislative Accomplishments in 2015
IRMA was at the forefront of a number of issues before the Illinois General Assembly this spring fighting to protect the interests of the retail industry and ensuring that legislation was passed that strengthens Illinois’ business climate.
On May 31, the General Assembly adjourned with no agreement between the governor and legislature on the FY16 budget. The House and Senate leaders have scheduled the legislature to be in session throughout June. IRMA will continue to watch issues closely throughout the summer and keep you apprised of any significant developments.
Here’s an overview of some of IRMA’s legislative successes this past spring:
IRMA was successful in getting both business and labor groups to oppose to HB3554. The bill initially required a two-week notice for scheduling and payment provisions if a person was called in unexpectedly or had their shift changed. A later amendment required an employer to enter into negotiations regarding an employee schedule if an employee requests a schedule change. IRMA pushed back on the basis that the legislation effectively mandated a collective bargaining scheme upon private employers. This bill did not pass through the General Assembly, but we fully anticipate it will return.
An initiative of Illinois Attorney General Lisa Madigan, SB1833 is intended to protect consumers by providing notice when certain personal information gets in the wrong hands. Such notice is already required for breaches of a person’s credit information, social security number and certain medical information related to diagnosis. The bill expands the state’s data breach notification law by adding new categories of information that will be considered personal and sensitive and by including notification to the attorney general’s office so that certain breaches can be posted on her website. After several months of negotiations with the attorney general’s office, SB1833 was amended to address the concerns of IRMA’s members. As a result, IRMA removed its opposition and took a neutral position on the bill. Some of the more important changes obtained by IRMA include: narrowing the definitions of consumer marketing and geolocation information to more closely target specific behavior of concern to the attorney general, removing the requirement to notify the individual when geolocation and consumer marketing information is breached, raising the threshold that triggers notification requirements and expanding the time allowed for businesses to notify individuals and/or the attorney general when information is breached. The bill now awaits the governor’s approval.
PRIVATE LABEL CREDIT CARDS
SB507 was reintroduced after Governor Quinn amendatorily vetoed the bill during his last few hours in office with unrelated language. SB507 allows a retailer to get a refund on the sales tax they pay on the bad debt created by consumers who use store-branded private label credit cards and fail to pay their bills either in part of in full. Over the last few years, IRMA worked with the Illinois Department of Revenue to address their procedural concerns including: ensuring proper documentation would be available, placing limits on the transactions that are available for a bad debt refund, and providing a clear line of accountability. As a result, SB507 passed the legislature and has been sent to the governor.
HB1 will create one of the nation’s most comprehensive approaches to combating heroin and prescription drug abuse. This legislation will expand specialized drug courts that center on treatment so that drug addicts can get rehabilitation services. It will also require schools and police and fire departments to stock naloxone, a drug that quickly counteracts heroin overdoses. IRMA fought for a significant change in this bill—it originally would have required pharmacies to serve as drug take-back sites for unused prescriptions. The amended version requires the state to provide information on how to properly dispose unused prescriptions, and requires the Illinois Environment Protection Agency to establish prescription take-back programs. The bill passed both chambers with the support of IRMA and a broad coalition and awaits the governor’s approval.
SB202 will establish a pilot program for Cook County to provide an accelerated route to adjudication for people accused of misdemeanor retail theft or criminal trespass. This bill will permit qualifying persons accused of the aforementioned crimes to either have a final judgement of their case within 30 days of arrest or be allowed to bond out of jail on their own recognizance until their hearing date. IRMA supports this bill because it addresses the crime of retail theft in a way that is fair to the victim without undermining the severity of retail theft, and also substantively addresses the concerns of taxpayers and criminal justice reform advocates. The bill passed the legislature and has been sent to the governor for his signature.
HB2513 is a trailer bill that clarifies the provisions passed in P.A. 98-1055, requiring retailers to obtain a license to sell cigarettes. IRMA worked closely with IDOR on the following provisions to P.A. 98-1055:
- Allow a waiver for records to be kept out of state;
- Broaden the employee training requirements;
- Allow the employee training to be conducted electronically;
- Provide an avenue to mitigate retail tobacco citations;
- Provide a waiver for closed loop distribution invoice record keeping requirements.
The bill passed unanimously through both chambers and is expected to be signed by the governor.
Business Day: A Great Success in the Capital City
IRMA and the Illinois Manufacturers’ Association (IMA) hosted a very successful Business Day in Springfield on May 6, 2015. More than 400 business leaders from around the state participated in Business Day 2015.
On the eve of Business Day, Illinois Governor Bruce Rauner spoke to the IRMA and IMA Boards at Saputo’s Italian Restaurant about the importance of a strong business economy in Illinois. He expressed the urgency to make Illinois a competitive state in terms of business investment and development.
Business leaders met with various lawmakers at the Capitol to share their concerns and discuss various legislative proposals that would affect the Illinois business community. Lawmakers on both sides of the aisle were encouraged to create a long-term path to economic growth through sound fiscal policy, tax reform, workers’ compensation reform along with opposition to new costly and burdensome regulations like a minimum wage hike, paid sick leave, new taxes on gasoline and soda and cuts to pharmacy Medicaid reimbursement.
At the Business Day luncheon, the keynote speakers were Illinois Senate President John Cullerton and Illinois House Minority Leader Jim Durkin; Congressman Adam Kinzinger (R-16th District) was also a featured speaker at the event.
Topping off the day was an 80s-themed Party Under the Tent which is a can’t-miss event. As always, the party featured live music and IRMA’s generous food and beverage members. Many thanks to Anheuser-Busch, Coca- Cola Company, Diageo, Dr. Pepper/ Snapple, E.J. Gallo Winery, KFC, McDonald’s, MillerCoors, Outback Steakhouse, PepsiCo, Saputo’s and Schnucks Markets for once again making this event an astounding success!
Commentary: A Path to Reforming Our Broken Sales Tax System
The following appeared June 2nd in the Washington, D.C. news outlet Roll Call
The ingenuity of the American entrepreneur has created an accommodating and diverse consumer marketplace over the past two decades. Through the rise of the Internet and emerging payment-processing innovations, countless businesses have been able to supplement their brick-and-mortar storefronts with an online sales presence. Unfortunately, our country’s sales tax system has not adapted to the convergence of digital and physical commerce. This has resulted in harsh consequences that have lingered on for nearly 20 years in the form of the unfair tax collection advantage that online-only retailers — such as eBay and Overstock — hold over millions of stores on Main Street.
Thankfully, this wrong can still be righted. With renewed bipartisan momentum now in the Senate, it is time for all of our elected officials in Congress to work toward expeditiously passing the Marketplace Fairness Act of 2015. This bill is a path to reforming our broken sales tax system.
To illustrate the anti-competitive elements of today’s marketplace, think about your own shopping experience. When you pay for a new pair of shoes, it is considered a sale — regardless of whether you make that purchase in-person at a local shopping center or online through a boutique’s website.
But unlike your local stores, online-only retailers do not collect sales tax at the moment of purchase. Believe it or not, the onus is on you to report and pay any necessary tax to your state’s department of revenue. It is easy to see why you and the brick-and-mortar stores in your neighborhood — which are legally required to collect sales tax if the state imposes one — bear the brunt of an unfair system.
As someone who has spent close to 40 years in the commercial real-estate sector, I am increasingly concerned about the inequities in our marketplace. This sentiment is fortunately shared by the group of senators — Michael B. Enzi, R-Wyo.; Dick Durbin, D-Ill.; Lamar Alexander, R-Tenn.; and Heidi Heitkamp, D-N.D., as well as others — that introduced the latest Marketplace Fairness Act. They know, much like the rest of us on Main Street, that we cannot accept a sales tax system that hinders American shoppers, businesses and local communities.
For consumers, maintaining the current system prolongs an archaic legal burden and a major shopping inconvenience. Shoppers will remain responsible for tracking purchases made online and then calculating the proper sum owed to their respective states. A failure to follow this process translates to breaking the law under our current system. Additionally, consumers stand to lose over the long-term when local businesses — which offer necessaries, specialty goods and custom items — cannot carry as much inventory or are ultimately forced to close due to the uncompetitive climate.
For brick-and-mortar businesses, the continuation of today’s system is akin to a death sentence. Local stores that must collect a sales tax increasingly function as showrooms for shoppers, who want to examine items and then order the same products online to save 5 percent to 10 percent in taxes. If this trend continues, we will see more businesses closing in our neighborhood shopping centers and town squares; our teenagers will be unable to find traditional part-time work; our neighbors will be unable to find that second job; and our communities will lose time-honored traditions such as Santa Claus sitting in the local department store every December.
For our communities and states, congressional inaction will bring additional economic and social impact. When brick-and-mortar businesses downsize or shutdown due to the marketplace, existing employees face both reduced job security and stagnant wages — plus the community endures weak job growth and an across-the-board reduction in tax revenue. This loss of tax revenue forces communities to make painful decisions, the most common being raising property taxes or cutting back on popular educational, recreational and public works services.
Last but not least, let us not forget the social downside that also comes when businesses can no longer sponsor little league teams, and organizations like the Salvation Army have no stores to stand in front of when advocating for society’s most needy. These are voids that online-only retailers will never be able to fill.
In the coming months, Congress will have ample time to debate the clear merits of the Marketplace Fairness Act and then pass a suitable version of the bill. Our responsibility during this time is to remind elected officials on Capitol Hill just how crucial this legislation is to American shoppers, businesses and communities. This action can go a long way to supplementing the current efforts of the International Council of Shopping Centers, Marketplace Fairness Coalition, NAREIT and hundreds of other local and national trade associations.
With deep experience purchasing and managing large retail shopping centers, I know the central role that commerce plays in supporting our shared American dream. Restoring fairness to our marketplace is an important step toward making that dream a reality for more of us in 2015 and beyond.
Daniel L. Goodwin is Chairman and CEO of The Inland Real Estate Group of Companies, Inc.
IRMA Members Encouraged to Write Letters in Support of Remote Transaction Parity Act of 2015
IRMA has long fought to level the playing field between brick-and-mortar retailers and remote selling competitors outside of Illinois who don’t collect the sales tax and use that loophole as a competitive advantage. Our consistent efforts have positioned Illinois to close this loophole. However, to bring our efforts to a successful conclusion, we need your help in getting Congress to act.
Formerly known as the Marketplace Fairness Act, the newly introduced Remote Transaction Parity Act (RTPA) would give states the right to impose a sales tax obligation on remote sellers. Because of this loophole that pre-dates the Internet, online-only companies can achieve as much as a 10 percent price advantage over brick-and-mortar retailers by not collecting state sales taxes. This special treatment means government is picking winners and losers in the marketplace, and local businesses simply cannot compete long-term with online giants that enjoy a government-sanctioned competitive advantage.
IRMA President and CEO Rob Karr is asking all IRMA members to write letters to our Illinois congressmen encouraging them to co-sponsor and actively support RTPA. “We need Illinois legislators to stand with and for our local retailers on this issue,” said Karr.
IRMA recently emailed a sample letter in support of the RTPA to members that you are welcome to adjust and use. If you need us to send that to you again or if you have any other questions on the matter, please call us!