Monthly Archives: June 2012

How The Healthcare Ruling Affects Your Business – PPAI Washington Report

The Supreme Court’s ruling on health care reform has and will continue to dominate headlines. Through our legislative contacts and lobbyists, PPAI has access to information, insight and analysis that you won’t see published anywhere else. Go beyond the latest headlines and learn more about how the ruling will impact your business with PPAI’s Washington Report:

SAFE BY A WHISKER

Who would think the future of health care reform would turn on the notion of a penalty not being a tax for the purpose of a statute but a tax for the purpose of constitutionality? But that is what it came down to.

The Patient Protection and Affordable Care Act (PPACA), starting in 2014, will impose a “penalty” on any individual not otherwise exempted or obtaining coverage from an employer, if the individual does not have health insurance with certain minimum benefits.

Noted the Supreme Court, “The ‘[s]hared responsibility payment,’ as the statute entitles it, is paid into the Treasury by ‘taxpayer[s]’ when they file their tax returns. It does not apply to individuals who do not pay federal income taxes because their household income is less than the filing threshold in the Internal Revenue Code. For taxpayers who do owe the payment, its amount is determined by such familiar factors as taxable income, number of dependents and joint filing status. The requirement to pay is found in the Internal Revenue Code and enforced by the IRS, which—as we previously explained—must assess and collect it ‘in the same manner as taxes.’ This process yields the essential feature of any tax: it produces at least some revenue for the Government.”

A majority of the Supreme Court thus concluded that when it comes to taxes, Congress has broader latitude in imposing taxes than it does on regulating commerce, and the individual mandate, when viewed as a tax for not having insurance rather than a requirement to purchase insurance, is constitutional.

To get to that point, the Court first actually rejected the notion that imposing the individual mandate was a permissible constitutional exercise of Congress’ ability to regulate commerce or an exercise of its necessary and proper clause. As the Court said, “The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce. Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority. Every day individuals do not do an infinite number of things…The Commerce Clause is not a general license to regulate an individual from cradle to grave, simply because he will predictably engage in particular transactions. Any police power to regulate individuals as such, as opposed to their activities, remains vested in the States.”

However, the court went on to note that when a law might not be justified under one constitutional clause, the Court’s duty is to “save a statute” if there is another constitutional clause to justify it. Thus, the alternative constitutionally permissible “tax” theory prevailed.

(Along the way the Court had to address the Anti-Injunction Act which would have made the decision premature because it says a tax cannot be challenged until you have paid it. The Court said that the Anti-Injunction Act specifically used the term “tax.” The Court said that for statutory Anti-Injunction purposes, the word “penalty” in PPACA was not a “tax,” but for constitutional purposes, the analysis of what constitutes a tax is broader; hence, the above analysis of constitutionality could consider it a tax even though PPACA used the word “penalty.”)

To learn more and get detailed TAKEAWAYS: How The Healthcare Ruling Affects Your Business – PPAI Washington Report

Promotional Products Day, End-Buyers/Customers at the 2013 PSI Trade Show

It was a just over a year ago that the PPAI Board of Directors voted to include a hosted end-buyer (customer) day on the final day of The PPAI Expo. It was a year ago this week that the Board voted to rescind that decision based on feedback from concerned members.

Right now, approximately 16 out of 27 U.S. regional associations host some form of end-buyer event in conjunction with one of their tradeshows. Based on what I learned this past week at the RAC Leadership Development Workshop (LDW) a few more are likely to take the plunge and it appears their respective memberships welcome the opportunities.

Nevertheless, the debate surrounding end-buyer shows continues on the national and international level—witness the ‘clarification’ Q&A from our colleagues at the PSI Trade Show in Dusseldorf, Germany (which is produced by Reed Exhibitions, a for-profit media company).

As covered by PPB Newslink and other industry media, PSI recently announced that they would be initiating an end-buyer Promotional Products Day on the final day of PSI Trade Show beginning in 2013. They obviously met resistance from their customers and have responded with the following letter and Q&A.

While I agree that there is a stronger case for hosting end-buyer events at the regional level as opposed to national events, I believe PSI makes a strong case in favor of Promotional Products Day at their event. I am supportive of their aim to “develop the PSI Trade Show in a way that responds to the requirements of the present and makes it fit for the future” and have their industry think in terms of ‘opportunities’ rather than ‘risks.’

If you have any thoughts you’d like to share publicly, feel free to post a comment. Or, you can reach me directly at paulb@ppai.org or 972-258-3050.

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Facts about the “Promotional Products Day” at the PSI Trade Show

Dear PSI members,

In the light of recent events we would like to clarify a number of points regarding the matter of the “Promotional Products Day” at the PSI Trade Show. We very much regret that this has given rise to some irritations which may also have led to some uncertainty on your part. Our communication in this matter may not have been ideal. This must, however, not lead to a situation where individual members intentionally publicise false information and at the end of the day cause damage to all of us by absurd allegations. Let me therefore point out the following facts:

1. Fundamental points: PSI aims at developing the Trade Show and the market. The market research organisation that has accompanied our industry for many years informs us that a sales potential of approximately 1 billion euros from small and medium-sized companies is not being realised. These are your sales which we would like to activate for you, for distributors, manufacturers and importers.

2. Promotional Products Day: We would like to develop a “Promotional Products Day” for the PSI Trade Show to take place on the Friday. It is to generate new opportunities for promotional products on many levels. On this day, we will take a large variety of measures to publicise promotional products and their impact. One means of doing so is to launch a targeted and very limited trial to demonstrate the world of promotional products to industrial customers. The idea is to allow 50 wholesalers to each bring along one of their top customers with the aim of consolidating this customer relationship and, and at the same time, to demonstrate to this customer the importance competent consulting has in view of this immense variety. These companies are also to permanently monitor this trial. Furthermore, we will enlist the advisory services of a marketing research organisation that has accompanied the industry for a long time in order to ensure representative and objective selection and results.

3. Trial: This trial to open the way to a broader acceptance of promotional products will have an open-outcome design. After PSI 2013, the monitoring companies and the market research organisation will exchange their experiences with PSI. We also invite all associations to join in this monitoring process. If this limited trial does not yield any convincingly positive result for the market participants, and particularly the wholesalers, it will be terminated at this point.

4. Consequences: If this accompanied trial does yield a positive result, PSI will discuss with members and the association how to proceed from there. The objective can, at most, be a limited opening up which is attended by distributors. In no way does the PSI aim at a general opening up of the Trade Show; to do so would run counter to all wishes within the industry and to the core idea of the membership system. So why should PSI do such a thing?

5. Tickets: There have been premature and public allegations from individual market participants that PSI is looking for new fields of business and planning to generate more income from admissions by opening up the Trade Show. We assure you that admission is entirely free of charge for the accompanied industrial customers. To believe that the PSI could enrich itself on ticket revenue generated by an opening up of whatever type is to entirely misjudge the situation. This is not the level to conduct a fair and constructive discussion. One look at the pocket calculator should make matters clear.

6. Objective: PSI’s only aim is to develop the PSI Trade Show in a way that responds to the requirements of the present and makes it fit for the future. This is what we want to work on in your interest and on your behalf, to prevent the show from losing its attractiveness and thus becoming redundant. We will not be able to progress into the future without to some extent involving those people who decide on the budgets. Other industries have already paid dearly for making that mistake. This is why we are looking for ways to increasingly convince these industry decision-makers of the value of promotional products. The trial with a limited opening up to accompanied industrial customers – and anything else would also be inconceivable to the PSI – is to provide us with important insights for the further development of the Trade Show. And I repeat: we invite the associations and members to join in this process, to accompany it in a critical and constructive spirit.

7. Risk: The PSI also feels it is its duty to take the PSI Trade Show into a future that yields the greatest possible benefit for all its members. It is a fact that already at this point many industrial customers are increasingly visiting trade shows abroad for direct information. More than 50 company shows in Germany alone also generate an informal contact between suppliers and industrial customers. There has also been a controlled and successful opening up of road shows. A large number of “Hannover Messe” marketing specialists have had direct and even uncontrolled access to Promotion World. And even at the PSI Trade Show, industrial customers are being repeatedly “smuggled” in. The “Promotional Products Day” is to provide us with clues about how to control and channel these processes. Let’s not forget the Internet. We must find answers to the question of how to involve and win over those people who decide on our budgets. The point is to actively strengthen existing structures instead of weakening them. The latter has usually been achieved by keeping one’s sights on the past. What we need is the positive view ahead.

8. Opportunities: We want to motivate all our members to think in terms of “opportunities” rather than always in terms of “risks”, as some people do. The world does not stand still. And that is why we quite intentionally expose ourselves to this discussion. We saw it coming and yet we tackled the issue, because our objective is nothing less than the development of the industry. We also understand that there are members who take a critical view of this trial. However, what we do not understand is why an open-outcome trial involving 50 accompanied industrial customers should prompt some members to proclaim a “holy war”.

9. Concept: On the “Promotional Products Day”, the industrial customers (50) will be clearly identified by a special name badge. In a separate dialogue, the PSI will point out this fact to the exhibiting companies and issue agreed instructions. A concept for the practical procedures is currently being developed. Familiar schemes are being investigated and again, the associations are invited to participate in this process. Let’s not forget the fact that each industrial customer will be accompanied by a distributor. And obviously distributors will only invite customers they trust. These industrial customers in turn will respond with an increased trust in their distributors.

10. Summing up: The PSI has launched a trial to find out whether granting limited and accompanied access to industrial customers for one day is a measure that generates stronger acceptance, recognition and, as a result, a higher budget for the industry. The PSI will not profit financially from this measure. On the contrary, it will face considerably higher costs caused by the supporting measures. The outcome of this trial is entirely open. We are only doing what any company does these days to optimise decisions and put them on a sound basis. The PSI invites all associations and members to constructively accompany this interesting trial, together with a market research organisation. Wholesalers can apply to participate in the trial and to help shape the process. If more than 50 members apply, the market research organisation will select a suitable sample.

11. Individual perspective: As a wholesaler, I would be happy to participate in this trial. The customer I would invite for a visit to Düsseldorf would either be one who is just discovering promotional products as a great advertising tool. Or one whom I have wanted to give a treat for a long time. I would take him around the Trade Show, take him to meet good and trustworthy suppliers and also demonstrate to him my capabilities in the technical field, i.e. printing. A tour around the halls would convince him more than ever of the huge variety of advertising possibilities our advertising medium offers. I am also certain that this tour of the show would generate fresh motivation in my customer. And I am confident that he will have an even higher opinion of my capabilities than he did already. I would also take him to visit interesting workshops and take advantage of other measures on the “Promotional Products Day”. Then I would take him out for a nice dinner. A great day for him, for us and, in the final analysis, for the industry. Let’s think in terms of opportunities – that’s precisely why we have been discussing this trial so openly.

12. Just a final word: If you would like to express agreement, misgivings or even pronounced criticism regarding this trial please talk to us directly. We look forward to a detailed, sincere and open dialogue.

PPAI And SAAGNY Announce EXPO East Tradeshow

As a reader of the Connections blog and recipient of my regular updates, you also receive other PPAI announcements prior to their release to general membership. Over the past year, PPAI has focused on reaching out to its growing membership, listening and learning. What we are announcing today is one of the fruits of those efforts.

I cannot express my gratitude enough for Jonathan Riegel and Alan Baker, both the SAAGNY and PPAI boards and the teams that have worked behind the scenes to bring this alliance and event to fruition. EXPO East will be a show like never before because of their commitment to member and industry service.

PPAI And SAAGNY Announce EXPO East Tradeshow
Atlantic City, NJ, (June 6, 2012) – Promotional Products Association International (PPAI; ppai.org), the not-for-profit association for more than 10,600 members of the $17.7 billion promotional products industry, today announced, from the floor of PROMOTIONS EAST, a strategic alliance between PPAI and the Specialty Advertising Association of Greater New York (SAAGNY) to produce Expo East, a promotional products tradeshow designed to serve the eastern United States. Under this strategic alliance, PPAI will bring its vision, growth management and production expertise to the robust eastern marketplace and PROMOTIONS EAST will cease operation at the close of this year’s show.

Over the past year, PPAI has focused on reaching out to members to better understand their needs and how the association can better serve the marketplace. Taking into consideration the abundance of shows already in the industry, it was determined that an alliance between PPAI and SAAGNY to form one show, as opposed to the creation of another show was the best way to impact the market in a positive way. Expo East will enable PPAI to reach thousands of members and industry professionals that were not attending PROMOTIONS EAST, The PPAI Expo or other major tradeshows.

The strategic alliance between the two associations allows SAAGNY to focus on providing enhanced member benefits and gaining new members. It allows PPAI to bring its expertise in producing The PPAI Expo to a new area and a new audience.

“By forming this strategic alliance with PPAI and letting them bring their tradeshow expertise to the East Coast, it allows SAAGNY to focus on its members and the growth of the association,” said Alan Baker, MAS, SAAGNY board president. “We are excited about focusing our staff and volunteers’ time on developing more valuable programs and services to better serve our membership.”

For more than fifty years, PPAI has produced The PPAI Expo, the promotional products industry’s longest running and most successful tradeshow event held every January in Las Vegas. The PPAI Expo is ranked among the Top 50 of ALL tradeshows in the U.S. and is the largest promotional products industry tradeshow in North America.

“Over the last 17 months, PPAI has grown by 38 percent to more than 10,600 members, 46 percent of which are based east of the Mississippi. With this type of growth, PPAI, as the voice and heart of the industry has an obligation to serve the industry and our members at every level, large and small – wherever they are – in every geographic area, said Paul Bellantone, CAE, PPAI president and CEO.  “Expo East will give us a substantial footprint in the eastern United States from which to serve our industry and our members like never before.”

Slated to open May 19-21, 2013 in Atlantic City, New Jersey at the Atlantic City Convention Center, Expo East will focus on the promotional products industry rooted in the eastern United States.  The new show is strategically designed to meet the needs of industry stakeholders with a preference for the location, timing and convenience of a truly unique East Coast event. Expo East will feature PPAI’s Vegas-style show production and its one-of-a-kind brand and DECORATE pavilions, its top-rated education and professional development programs.

“Launching Expo East is consistent with PPAI’s desire to be more inclusive with its members. We realize that there is a fairly high percentage of our membership located in the eastern U.S. not attending The PPAI Expo in Las Vegas. Therefore, they were missing out on the opportunity to experience all the great products, networking and education offered at Expo. Expo East will bring that experience to them,” said Steven Meyer, MAS, PPAI chair of the board.

“We’re raising the bar on how we go to market not only on the East Coast — but nationwide,” said Jonathan Riegel, MAS, SAAGNY executive director. “The strategic alliance between SAAGNY and PPAI to create Expo East represents one of the industry’s most significant business developments in many years – a truly strategic investment in the way associations strive to meet our members’ needs.”

More information about Expo East may be found here.

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.  Today, PPAI serves more than 10,600 member companies and 432,000 industry professionals who lead the $17.7 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 offers education, tradeshows, business products and services, mentoring, technology and legislative support to its members. 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.

About SAAGNY
SAAGNY is the largest regional association in the U.S. devoted to the betterment of the promotional products professional. SAAGNY represents more than 700 distributors, suppliers, multi-line representatives and business services companies.

The Washington Report

As I’ve shared on this blog before, through our legislative contacts and lobbyists, PPAI has 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.

This month’s report gives you insight into upcoming changes at the CPSC, the regulatory body that implements the Consumer Product Safety Improvement Act (CPSIA), Congress’ work on small business tax relief and a possible reform of the Toxic Substances Control Act (TSCA).

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

CPSC COMMISSIONERS
The Consumer Product Safety Commission (CPSC) consists of five commissioners. One Democrat’s term expired last October, creating a deadlock. However, this October the term of one of the Republicans will expire. President Obama has nominated a new Democrat to serve and a Senate committee hearing has been held on her nomination. It would seem unlikely the Republicans would allow her confirmation to proceed without some sort of deal to get a Republican confirmed. Either way, the CPSC is going to end up with a Democratic majority again at some point this year.

The Democratic nominee is Marietta Robinson, a lawyer from Michigan. During the hearing, Robinson said among other observations, “I believe one of the most important things the Commission can and must focus on doing is enforcing existing product safety requirements and making sure that violative products never enter this country in the first place. The Commission has recently enhanced its Office of Import Surveillance, which puts CPSC ‘boots on the ground’ in select U.S. ports of entry. This office also shares data with U.S. Customs and Border Protection in order to further target potentially dangerous products. If confirmed, I look forward to working with my fellow Commissioners to further strengthen this critical program.”

WHAT’S IN YOUR POCKETBOOK?
Senate Majority Leader Harry Reid (D-NV) says the Senate will debate the merits of S. 797, the Paycheck Fairness Act, which deals with an Equal Pay Act (EPA) issue.  It revises the “any factor other than sex” defense by requiring employers to provide non-gender reasons for the difference in wages based on a business justification.

The EPA requires that men and women be given equal pay for equal work in the same establishment. The jobs need not be identical, but they must be substantially equal. It is job content, not job title, which determines whether jobs are substantially equal. Specifically, the EPA provides that employers may not pay unequal wages to men and women who perform jobs that require substantially equal skill, effort and responsibility, and that are performed under similar working conditions within the same establishment.  Pay differentials are permitted when they are based on seniority, merit, quantity or quality of production, or a factor other than sex. These are known as “affirmative defenses” and it is the employer’s burden to prove that they apply. These are defenses the bill seeks to revise.

The bill revises the “any factor other than sex” defense by requiring employers to provide non-gender reasons for the difference in wages based on a business justification.  An employer must demonstrate that the disparity is based on a bona fide factor other than sex, such as education, training, or experience, that is: (1) not based upon or derived from a sex-based differential; and (2) related to the position in question; and (3) consistent with business necessity. Such a defense shall not apply if the employee can then demonstrate that an alternative employment practice exists that would serve the same business purpose without producing the differential, and the employer refused to adopt the alternative.

The EPA is actually part of the Fair Labor Standards Act (FLSA) but is administered and enforced by the Equal Employment Opportunity Commission (EEOC). Since the EPA is a provision of the FLSA, the basic employee threshold is that of the FLSA, which means it is generally applicable regardless of the number of employees (e.g., a retail establishment with an annual dollar volume of sales of less than $500,000 and no employees engaged in interstate commerce). The exemptions of the FLSA (e.g. white collar) do not apply.

This bill is not to be confused with the Ledbetter Fair Pay Act of 2009, which was signed into law on January 29, 2009. The law amends various other federal equal employment opportunity laws (Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA)) to clarify discrimination occurs every time a paycheck is issued following a discriminatory compensation decision.

SMALL BUSINESS BILL
Senate Majority Leader Harry Reid (D-NV) also plans to have the full Senate consider his small business bill in June. S. 2237. The Small Business Jobs and Tax Relief Act would provide a one-time tax credit of up to ten percent of the incremental increase in wages paid by an employer in 2012 over 2011 wages. The incremental increase in the amount of wages eligible for the credit is capped at $5 million. His bill would also extend the temporary 100 percent depreciation bonus through 2012. At the end of 2011, the temporary bonus dropped to 50 percent and it will expire at the end of the year.

You may recall this is Senator Reid’s counter offer to the House Majority Leader Eric Cantor’s (R-VA) small business bill, H.R. 9, which the House has approved. H.R. 9 would allow profitable small businesses to reduce their taxable income by up to 20 percent for one year. A small business is one with less than 500 full time employee equivalents for the purpose of the bill. The reduction is limited to not more than 50 percent of wages paid in the year.

CHEMICALS
“The Chicago Tribune series published this week reveals that flame retardant chemicals added to furniture and other household goods are not only useless, but also toxic for our families—especially young children. The disturbing truth is that flame retardants are only one example of the many toxic substances that have made their way into American homes as a result of self-serving chemical companies and the weak, ineffective federal law that has regulated chemical safety standards since 1976. We have to come together on a bipartisan basis to pass the Safe Chemicals Act and provide Illinois families with the basic level of safety they expect,” said Senator Richard Durbin (D-IL). He is calling for passage of the Safe Chemicals Act, which would update and modernize the Toxic Substances Control Act of 1976. According to Durbin, the proposed legislation will give Environmental Protection Agency (EPA) more power to regulate the use of “dangerous” chemicals and require manufacturers to submit information proving the safety of every chemical in production and any new chemical seeking to enter the market.