The Washington Report- Marketplace Fairness Act Continues

Through our legislative contacts and lobbyists, PPAI has access to up-to-the-minute information, insight and analysis that you won’t see published anywhere else. The information in this month’s special Washington Report focuses on the Marketplace Fairness Act and the debate over the collection of sales and use taxes from consumers by out of state sellers. It is timely information that will help you become more aware and better prepared to advocate for your business, profession and industry.

I hope you find this information beneficial to your business.

As the debate over online usage tax heats up, the Senate readies for a vote over the Market Place Fairness Act as early as next week. Additionally on the Hill, the efforts of the House and Senate turn to the possibilities of raising the minimum wage.

MARKETPLACE FAIRNESS ACT

U.S. Senate proponents of legislation that would require all sellers to collect a state’s sales or use tax overcame two efforts to filibuster the Marketplace Fairness Act, S. 743. The margins on the votes were well over the 60 votes needed.

The Senate left for a scheduled recess before a vote could be taken on the final bill. The final vote for approval of their version is scheduled for May 6. If the Senate approves the bill, the House of Representatives must still consider it.

The bill would allow states to secure jurisdiction (nexus) over out-of-state sellers to require them to collect and remit use taxes. The legislation exempts sellers that make less than $1 million in total remote sales in the year preceding the sale from the collection requirement.

The bill is constructed around acceptance of the Streamlined Sales and Use Tax Agreement (SSUTA) by states. On November 12, 2002, representatives of 33 states and the District of Columbia (now 44 states) voted to approve a multi-state agreement to simplify the nation’s sales tax laws by establishing one uniform system to administer and collect sales taxes on the several trillion dollars spent annually in out-of-state retail transactions. The effort is known as the Streamlined Sales Tax Project (SSTP). The states have been implementing the agreement. Twenty-four states, representing more than 33 percent of the population, have adopted the simplification measures in the agreement.

Under the bill, states that voluntarily are or will become member states of the SSUTA would be able to require remote sellers to collect and remit sales and use taxes after 90 days. States that do not wish to become members of SSUTA would be allowed to collect the taxes only if they adopt certain minimum simplification requirements and provide sellers with additional notices on the collection requirements. The requirements are similar to, but not as comprehensive as, the conditions SSUTA members have accepted.

The following states that have passed legislation to conform to the SSUTA are: Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin and Wyoming.

MINIMUM WAGE

The Senate majority is expected to jumpstart an effort to increase the minimum wage this summer. The focus will be S. 460, the Fair Minimum Wage Act of 2013. The bill amends the Fair Labor Standards Act of 1938 (FLSA) to increase the federal minimum wage for employees to: (1) $8.20 an hour on the first day of the third month after the enactment of the bill; (2) $9.15 an hour after one year; (3) $10.10 an hour after two years; and (4) the amount determined by the Secretary of Labor (based on increases in the Consumer Price Index) after three years, and annually thereafter.

FTC JEWELRY GUIDELINES

The Federal Trade Commission (FTC) will hold a public roundtable on June 19 to examine possible modifications to the FTC’s Guides for the Jewelry, Precious Metals, and Pewter Industries. The Jewelry Guides address claims made about precious metal, pewter, diamond, gemstone and pearl products. The guides explain how to avoid making deceptive claims and, for certain products, discuss when disclosures should be made to avoid unfair or deceptive trade practices

The FTC started a review of the Jewelry Guides last year and chose to schedule a roundtable after receiving a variety of comments. It has identified two specific areas for discussion although the roundtable will not be limited to them: the marketing of alloy products containing precious metals in amounts below the guides’ minimum thresholds and surface applications of precious metals.

In the Federal Register notice for the roundtable, the FTC provides background on these two issues and other issues that have been identified. You can find the Federal Register notice at: http://www.ftc.gov/os/2013/04/130430jewelryguides.pdf

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