Monthly Archives: March 2012

A Love Letter

It goes without saying that I am a big fan of PPAI.  I get excited to come to work each day and I fully embrace my role at the industry’s international nonprofit trade association.  Each day, the PPAI staff works hard to grow the viability, visibility, credibility and community of the promotional products industry, our member companies and hundreds of thousands of industry practitioners.

The fact that PPAI owns and produces The PPAI Expo – our industry’s largest, longest running and most successful tradeshow – is both a blessing and a curse. It is a blessing in that it, along with revenue generated through membership dues and media sales, provides the funding to do all the non-revenue generating activities the association must provide.  Activities such as awards, public affairs, government relations, product safety, research, professional development, regional support, strategic partnerships and buyer outreach – while all integral to building the viability, visibility, credibility and community of our industry – are not in themselves self-sustaining.

It is a curse, only in a matter of speaking, because The PPAI Expo is so dominant, some industry practitioners think it’s all we do.  But, it is truly the sum of the parts that sustain us and produce the growth we’ve enjoyed over the past 109 years.

I am pleased to share the attached “love letter” with you. It speaks specifically to PPAI’s value to the industry and why we’re so much more than a tradeshow.

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PPAI – A Rich History and a Promising Future

Last week I attended an event hosted by the Irving Heritage Society and the Irving Chamber of Commerce to recognize the oldest businesses in Irving, TX.  PPAI and the city of Irving were both founded in 1903. PPAI moved its headquarters from Chicago to Irving in 1979. 

While I knew we were one of the older businesses in Irving, I was surprised to learn that PPAI is actually the OLDEST business in the city. There are other organizations that have been doing business in Irving longer – some for 60 years or more – PPAI at 109 is indeed the oldest. The PPAI News Release below will be sent to local and industry media next week. 

As a member of PPAI you are part of something very special… a history that spans generations and more than a century. I am very proud to serve this organization as a bridge from its rich history to a very promising future. 

PPAI Recognized Among City’s 20 Oldest Businesses

IRVING, Tex. (March 15, 2012) – Promotional Products Association International (PPAI; ppai.org <http://www.ppai.org> ), the not-for-profit association for more than 10,000 member companies of the $16.5 billion promotional products industry was honored by the Irving Heritage Society, the Chamber of Commerce and a group of more than 75 civic leaders as one of 20 oldest companies in Irving, Texas. The Association, the oldest organization doing business in Irving and the oldest serving the promotional products industry, was originally established November 20, 1903, as the National Association of Advertising Novelty Manufacturers.  Renamed in 1991, PPAI as it is now known moved to Irving in October 1979.

“We are truly humbled to be recognized among businesses with such rich histories,” said Paul Bellantone, CAE, PPAI president and CEO. “We continue to be grateful for all the Irving Heritage Society does to preserve that history, and the City of Irving and the community do to provide for a prosperous and supportive climate in which to work and do business.”

The Chamber alongside the Irving Heritage Society, U.S. Congressman Joe Barton, Representative Linda Harper-Brown, Mayor Pro Tem Rick Stopfer and more than 75 other attendees recognized Irving’s 20 oldest businesses during a reception last Tuesday night. The reception was a part of this year’s 100th Anniversary events celebrating the Irving Heritage House, one of Irving’s oldest, most historic landmarks and a symbol of Irving’s rich history. PPAI was presented the Certificate of Special Congressional Recognition by U.S. Congressman Kenny Marchant and The State of Texas House of Representatives special recognition by State Representative Linda Harper-Brown.

Other notable companies recognized included, Holt Cat, 1905 (Darr Equipment), NCH Corporation, 1919, Irving Shoe Repair, 1945, John Myers Pump Services of Texas, 1945, Moore Roofing, 1946, Porter’s Army Navy Store, 1946, Watson Radiator Shop, 1946, M. A. L. Hobby Shop, 1948, Schnee Morehead, 1948, Big State Drug Store, 1948, Adam’s Plumbing, 1949, Mantooth Construction Company, Inc., 1949, Crouch Sand & Gravel, 1950, Owens-Corning, 1953, Medical & Surgical Clinic of Irving, 1953, Mammen Glass &Mirror (M3 Glass Technologies), 1955, Waldrum Lighting & Signs, Inc., 1959, Louis Barber Shop, 1961, Irving Counter, Inc., 1962, Baylor Medical Center at Irving, 1964, Frito-Lay, Inc., 1967, Al’s Rent to Own, 1967, Toyota of Irving, 1968, Joe’s Coffee Shop, 1971, Sonic-Lear Enterprises, 1974 and Wild Bill’s Hobby Shop, 1975.

About PPAI

Since 1903, the Promotional Products Association International, a not-for-profit, has been the standard-setting international trade association for the promotional products industry. PPAI offers education, tradeshows, business products and services, mentoring, technology and legislative support to its members. Today, PPAI serves more than 10,000 global member companies who lead the $16.5 billion industry. The multi-billion-dollar industry includes wearables, writing instruments, calendars, drinkware and many other items, usually imprinted with a company’s name, logo or message. PPAI created and maintains the UPIC (Universal Promotional Identification Code), the industry’s only free identification system and universal company database. For information regarding PPAI or to learn more about the proven power of promotional products (including research and case studies), visit the PPAI website at www.ppai.org <http://www.ppai.org/> .

Save The Industry… Support A L.E.A.D.er

Did you know that for each of the 60+ industry L.E.A.D.ers heading to Washington DC this week to advocate for the promotional products industry there are more than 500 companies ‘back home’ that will benefit from the time and energy they are dedicating on our behalf.

Here are two things you can do to help and show your appreciation…

First, thank a L.E.A.D.er! They’re just like you – suppliers, distributors, promotional consultants, regional members – but they’ve already dedicated hours of their time setting appointments for face-to-face meetings with members of Congress to advocate for our industry. They’re traveling on their own dime and taking time away from customers, families and businesses, to help our industry. They deserve our respect and gratitude.

Second, support them by participating in L.E.A.D. activities from your home or office. There’s power in numbers and you can engage your elected officials locally while we’re in DC. Here’s how:

  1. Click PPAI L.E.A.D.and follow the prompts to ask your Senators and your member of Congress to:
    1. Keep the unique needs, challenges and interests of the promotional products industry in mind when considering legislation.
    2. Watch for any legislation that would curtail the use of independent contractors.

It will probably take you less time to act on these requests than it did to read the instructions. 

  1. Encourage others to follow your example by spreading the message through your social media channels using #ppailead—we’ve even provided the posts for you.
  2. Track our progress on Twitter as we work our way through the halls of Congress. Follow @PPAILegislative and @Bellantone. Or,      search for #ppailead. Be sure to retweet updates for your industry      followers.

This is going to be another powerful event; I thank you in advance for your support.

And to all the L.E.A.D.ers making the trip to Washington… On behalf of a grateful industry, I thank you.

Keeping Our Industry Front and Center

I’ve barely unpacked from this week’s trip to California for a PMANC Town Hall and it’s already time to load up my bags again. This time, however, there is no tradeshow to attend, no numbered aisles to walk.  This trip is about advocacy, education, information. This trip is about taking the collective voice of our industry and sharing it with those who need to hear it most.

On Monday, I’ll head to Washington, D.C., for the third-annual PPAI Legislative Education and Action Day (L.E.A.D.).  I’ll participate in a day of meetings on Tuesday with the Federal Trade Commission (FTC) and various other committees before I’m joined by dozens of industry-leaders-turned-industry-advocates that evening.

March 7-8, more than 60 promotional products professionals will meet, face-to-face, with their Senators and Representatives to increase awareness of the value and importance of our industry.

And, it’s my privilege to announce that this experience will now be available to all industry members, regardless if they’re joining us on the Hill, or remaining at home.

From 2010-2012, the number of L.E.A.D. participants has tripled, as has the number of meetings with members of Congress. It’s because of the increasing desire to attend this event—to make a difference—that we’re inviting all industry leaders—all advocates—to get involved.

It’s my sincere hope that you’ll help us increase our impact on Washington next week by adding your voice to ours online—it’s a way to make a difference without leaving your desk:

  1. Click PPAI L.E.A.D.and follow the prompts to ask your Senators and your member of Congress to:
    1. Keep the unique needs, challenges and interests of the promotional products industry in mind when considering legislation.
    2. Watch for any legislation that would curtail the use of independent contractors.

It will probably take you less time to act on these requests than it did to read the instructions.

  1. Encourage others to follow your example by spreading the message through your social media channels using #ppailead—we’ve even provided the posts for you.
  2. Track our progress on Twitter as we work our way through the halls of Congress. Follow @PPAILegislative and @Bellantone. Or, search for #ppailead. Be sure to retweet updates for your industry followers.

I’ll be sending e-mail updates each day next week, so keep an eye on your inbox.

This is going to be another powerful event; I thank you in advance for your support—take action online in 2012, in person in 2013!

NEW FEATURE: The Washington Report

Welcome to The Washington Report

I can say without hesitation that PPAI leads the way in advocating for its members, the promotional products industry and for the issues that are important to small businesses.

Through our legislative contacts and lobbyists, we have access to information, insight and analysis that you won’t see published anywhere else. Information that will help you better understand how what happens in D.C. can affect your business and employees at home. Information that will help you become more aware and better prepared to advocate for your business, profession and industry.

The Washington Report is a new monthly feature for readers of this blog. I hope you enjoy it.

NO PAYROLL TAX INCREASE

Congress decided to skip the high drama and renewed the temporary two-percentage point reduction in payroll taxes.  You may recall that when it was expiring at the end of last year, Congress ended up renewing it for just two months.  Congress passed and the President has signed the Middle Class Tax Relief and Job Creation Act of 2012 (MCTRJCA) into law. Employees will continue to receive the two percent reduction and so will the many self-employed in our industry for the rest of year.  Employers continue to pay their full share for employees.

If you like technical details, we have them.  Under existing law, the Federal Insurance Contributions Act (FICA), employers pay a tax based on the amount of wages paid to an employee during the year.  The tax imposed is composed of two parts: the old age, survivors, and disability insurance ((OASDI) and sometimes referred to as the “Social Security tax”) tax equal to 6.2 percent of covered wages up to the taxable wage base ($110,100 for 2012); and the Medicare hospital insurance (HI) tax amount equal to 1.45 percent of covered wages.  In addition to the tax on employers, each employee is subject to FICA taxes equal to the amount of tax imposed on the employer (the “employee portion”).  The employee portion of FICA taxes is withheld and remitted to the Federal government by the employer.

The Self-Employment Contributions Act (SECA) tax applies to the self-employment income of self-employed individuals.  The rate of the OASDI portion of SECA taxes is 12.4 percent, which is equal to the combined employee and employer OASDI FICA tax rates, and applies to self-employment income up to the FICA taxable wage base (thus $110,000 in 2012).  Similarly, the rate of the HI portion of SECA tax is 2.9 percent, the same as the combined employer and employee HI rates under the FICA tax, and there is no cap on the amount of self-employment income to which the rate applies.

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 gave us the first temporary reduction (for 2011) in the OASDI rate for the employee portion of the FICA tax.  It was reduced by two percentage points to 4.2 percent.  Similarly, for taxable years beginning in 2011, the OASDI rate for a self-employed individual was reduced by two percentage points to 10.4 percent.  The Temporary Payroll Tax Cut Continuation Act of 2011 extended that two-percentage point reduction through the end of February 2012.  The new law extends the reduction through December 31, 2012.

 IT IS GOING TO GET MESSY

 As we previously reported, unless Congress does something before the end of the year, many of us are going to get hit with the Alternative Minimum Tax (AMT).  The temporary increases in the income levels at which the AMT kicks in expired at the end of 2011.  The income levels for the 1960’s tax were never indexed and Congress has been artificially propping them up (thank goodness!) to avoid having literally millions more taxpayers paying the AMT.  If Congress does not do something, when we fill out the tax forms at the beginning of 2013 for our 2012 income the AMT may be a bigger part of our tax bills.  In addition, at the end of 2012, the temporary reduction in the top individual margin rate and the estate tax relief expire.  To add to Congress’ tough choices, the aforementioned payroll tax relief will expire again.  Many folks are wondering whether Congress and the President have the will in a congressional and presidential election year, to avert the looming tax increases.  Stay tuned.

ANOTHER TAX REFORM PLAN

The President has shared his thoughts on business tax reform.  It is only a general outline (25 pages) so it is difficult to draw any clear conclusion as to who are the winners and losers.  (The unstated goal of any tax reform plan is make us all feel like we are winners, but the hard numbers usually tell another story.)

“The President’s Framework For Business Tax Reform” (Framework) proposes the adoption of a lower C Corporation top rate.  At the same time, however, it proposes the elimination of some business “tax expenditures” (some would call them “loopholes”) in exchange for the lower rate.  It does not specify what those “tax expenditures” might be but the repeal of the Last In/First Out (LIFO) method of inventory accounting is used as an example.  There are so many credits and deductions that are considered tax expenditures we will just have to see which are chosen before you can determine what it means to your business, if you are doing business as a C Corporation.

One the other hand, the future does not look as bright under the proposal for sole proprietorships, partnerships, and S Corporations.  There is no rate relief for those pass-through entities.  Most tax expenditures are not limited to use by businesses using certain tax structures, which adds up to the pass-through entities potentially ending up with a net increase in tax liability.

The Framework does offer two provisions specifically for small businesses.  The President’s proposal would allow small businesses to expense up to $1 million in investments and allow cash accounting on businesses with up to $10 million in gross receipts.

Whether the cash accounting proposal does anything for you depends on a lot of facts.  Currently there is one tax code section that allows businesses with $5 million or less in gross receipts to use cash accounting.  However, there also other sections that “override” that section that require you to use accrual accounting.  The biggest one is a section of the tax code that says if you are required to use inventory accounting in your business for tax purposes, you have to use accrual accounting.  At the same time, there are sections of the tax code and Internal Revenue Service administrative rules that allow you to cash accounting even though you have more than $5 million in gross receipts.  Confusing.  That’s why we have to have lawyers and accountants.

As we have previously reported, the President mentioned some help for manufacturers in his State of the Union.  The Framework expands on the nature of the help.  One item would be to increase the existing Domestic Production Activity Deduction (Internal Revenue Code Section 199).  Basically, Section 199 currently allows businesses to reduce their taxable income by nine percent for U.S. based activities.  Unfortunately, the President’s framework also calls for the definition of manufacturing to be tightened up and, as a result, some businesses would lose the ability to use DPAD.  We do not know what “tightened up” means, but, at least by definition, some suppliers in our industry currently qualify for relief under Section 199.