Tag Archives: Legislative Action

GET Connected: PLUG-IN to the POWER of PROMO

GET Connected: PLUG-IN to the POWER of PROMO during Promotional Products Work! Week, May 13-17

Next month, Promotional Products Work! Week will take center stage. During the week of May 13-17, the industry will collectively shine the spotlight on the benefits of working with promotional professionals and the undeniable power of promotional products.

Why is Promotional Products Work! Week so important? More than 40,000 promotional products companies and a workforce of more than 500,000 professionals contribute billions of dollars to local economies and more than $23.3 billion to the U.S economy. Nearly the entire promotional products industry is composed of small businesses—96 percent—that make real and tangible differences in their communities as volunteers, business-owners, tax payers and purveyors of goods and services. In many instances, promotional products serve as the first and last impressions relied on by the more than 30 million U.S. businesses to build brand awareness and loyalty and inspire action among employees, clients and consumers.

By committing to at least one activity during the week of May 13-17, you will help promote and protect your business and our vibrant industry, while also making a powerful impact by adding your story and your voice alongside thousands of industry professionals.

Last year, Promotional Products Work! Week was celebrated in a big way in cities throughout the U.S. and abroad with factory tours and open houses, speaking engagements, volunteerism and community outreach, legislative outreach in Washington, D.C., at the state and local levels and with personalized expressions of gratitude to the industry’s customers.

The highlight of 2018 was the PPW!Week Official Kick Off produced by Regional Association Promotional Products Association of the Mid-South (PPAMS) in partnership with the Shelbyville-Bedford County Chamber.

The two-day event included a SHEPENCO ribbon-cutting ceremony and factory tours hosted by Henry Hulan III, president of Musgrave Pencil Company founded in 1914, and Dan Townes, president, and his son, Daniel Townes, chief operations officer of SHEPENCO, founded in 1933, both headquartered in Shelbyville, Tennessee, known as “The Pencil City,” with Congressman Scott DesJarlais in attendance. A proclamation for the City of Shelbyville presented by Mayor Wallace Cartright and City Council, declaring it Promotional Products Work! Week—and if that wasn’t enough, the City passed a resolution renaming itself “Promotional Products City USA” to commemorate the week.

Next was a luncheon held at the Blue Ribbon Circle and the gathering of state and local dignitaries, distributors, suppliers, buyers and PPAMS board members, where I was humbled to share the stage with Shelbyville-Bedford County Chamber of Commerce CEO Allen Pitner to share on the state of the industry.

The festivities culminated with Tennessee government officials, including City of Shelbyville Mayor Wallace Cartright, County Official Scott Johnson (presenting on behalf of County Mayor Eugene Ray) and Senator Shane Reeves, who presented proclamations from the City of Shelbyville, Bedford County and the state of Tennessee (signed by Senator Shane Reeves, Lieutenant Governor Randy McNally and State Representative Pat March).

All of this was made possible through the commitment and leadership of the PPAMS Board and Executive Director Mark Farrar and his amazing team.

GET Connected: Get the toolkit!

Promotional Products Work! Week, now in its seventh year, is an industry-wide event dedicated to demonstrating the importance of working with promotional professionals to design and implement creative and successful campaigns while creating awareness for promotional products as a powerful and effective advertising and marketing medium. The week is designed to reach key audiences and feature a variety of activities, including open houses, factory tours and hospitality events; new client prospecting and lead generation; an advocate day focusing on community, colleges and business groups; legislative action; and customer appreciation.

Celebrated annually, the week-long event is designed for the entire industry—large and small companies, regional associations, distributors and suppliers, business services providers and multi-line representatives—to get behind an industry-wide movement in support of demonstrating the power, value and effectiveness of promotional products.

Here is the link to the GET Connected: PLUG-IN to the POWER of PROMO campaign toolkit. Download the PPW!Week campaign assets, including the Organizers Guide, Publicity and Promotion Toolkits, videos, social posts and infographics and much more. GET Connected, PLUG-IN and get started today!

Please share within your companies and with your colleagues around the industry.

Spread the word!

Paul

Action Alert: PPAI Joins Coalition In Opposing Potential Tariffs

Earlier this week, we announced that PPAI joined 44 other associations and trade groups in a letter to President Trump to strongly oppose proposed tariffs of up to $60 billion. Please add your voice to ours and ask your members of Congress to oppose these proposed tariffs that would be very harmful to our industry.

~ ~ ~ ~ ~

Resist The Latest Round Of Tariffs

Within the business community, there are legitimate concerns about significant intellectual property and forced technology transfer issues in China. However, placing tariffs on products that are legitimately produced and traded is not the remedy. Last week it was reported in a variety of news outlets that tariffs of up to $60 billion could be proposed. Such tariff treatment would be harmful to the promotional products industry.

The specific list of tariffs has not been released, but it appears that the technology and telecommunications sectors will be targeted, and other affected products could include a variety of items including toys, apparel, footwear and consumer technology.

The level of tariffs has also not been specified. Although there could be up to 100 products vulnerable to the tariffs, the White House has not announced whether there will be one global tariff on products from China, or if there will be varying tariff levels depending on the product.

Imposing tariffs on electronics, apparel and other products would raise prices for American consumers and companies, and would not do much to address the problems that stem from unfair trade practices in China. Effectively, the increased costs would impose a tax on consumers and businesses.

Please contact your members of Congress and urge them to oppose this harmful tariff announcement.

Take Action Today

Guest Post | Thoughts on PPAI L.E.A.D. in Washington, D.C.

If Coke and Pepsi can set aside their battle of the brands for a worthwhile cause, so too can the promotional products industry. During PPAI’s Legislative Education and Action Day (L.E.A.D.) event held in May, industry representatives from around the country united to encourage our nation’s legislators to consider critical issues important to the entire industry.

Today I am pleased to present a guest post, “Thoughts on PPAI L.E.A.D. in Washington, D.C.”  by Kyle A. Richardson, editorial director of Promo Marketing magazine. This PM blog originally appeared in the June 27, 2016 issue of Promo Marketing.

Thank you, Kyle, for joining us for the PPAI L.E.A.D. We are grateful for your participation and retrospective on the critical importance of our industry’s unified voice in D.C.

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Last month I had the privilege of joining a select group of promotional products professionals in Washington, D.C., for Promotional Product Association International’s (PPAI) Legislative Education and Action Day (L.E.A.D.). Influential industry members from across the country volunteered their time to head to our nation’s capitol, to raise awareness about our industry and the legislation that impacts suppliers and distributors.

We’ve reported on many of these business topics—independent contractor requirements, the Affordable Care Act, Toxic Substances Control Act reform—but it is another thing entirely to go to D.C. and speak to senators and representatives about our industry, our concerns and our needs. When you see a small section of our community—just 80 volunteers in all—organize more than 300 meetings over two days, you start to appreciate the significance of what PPAI has put together.

It isn’t just the numbers, either: Who was in attendance is just as important. Supplier CEOs, distributor franchisees, multi-line representatives and more all stood united in D.C. We were organized by state, with many groups consisting of companies in direct competition with one another. Along with some suppliers and distributors, I was on the Pennsylvania team representing Promo Marketing next to ASI’s own senior vice president and senior counselor, Chuck Machion. No one was concerned about business rivalries. We were all there to do the same job.

PPAI_LEAD - PM 6-27-16

Left to Right: Kyle A. Richardson; Bruce Korn, CAS, president of Zakback Inc.; U.S. Rep. Ryan Costello (R-PA); Larry Whitney, director of global compliance for Polyconcept North America.

What most stood out, however, was seeing that what we’re doing works. In several meetings, staffers greeted members of our team by name, recalling them from last year’s event. In other meetings, representatives mentioned receiving emails from suppliers and distributors as part of Promotional Products Work! Week. One staff member we met with took notes on the PPAI L.E.A.D. notebook he received in 2015. If you think events like this don’t have an impact, you’d be surprised.

You also may be surprised to learn that every D.C. staffer looks like they’re 17. Don’t let “House of Cards” fool you: Everyone in the Capitol is too young to drink.

I want to thank PPAI for inviting me along this year, as well as all the members of my team—Chuck, Bruce Korn of Zakpack Inc., George Jackson of George Jackson Promotions, Larry Whitney of Polyconcept North America and Norm Hullinger of alphabroder.

It’s said you should lead, follow or get out of the way. The promotional products industry has made it clear which path it will take.

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Kyle Richardson

Kyle A. Richardson is the editorial director of Promo Marketing. He joined the company in 2006 brings more than a decade of publishing, marketing and media experience to the magazine. If you see him, buy him a drink.

 

Participate. Elevate. Celebrate.

PPW!Work_Logo2016

Next week is Promotional Products Work! Week, and together we will build awareness and increase exposure to grow and protect our industry. Everyone has a role to play and each action, no matter how small, will make a big difference at the local, state and national level. You can help by raising awareness in your own company, community and among your current and future customers!

Many of you already have the whole week planned out, but if you haven’t yet started, it’s not too late! Here are a few things you can do—easily, quickly and inexpensively—to promote your business and strengthen our industry right now!

Take a few minutes to reach out. We’ve made it simple and easy.

Initiate. Inform. Influence.

  • Download the PPW! Week guides and toolkits.

    PPWW Persona Quad Ad Set

    Download & add your logo to the #PPWWeek co-op campaign!

  • Use the banners, infographics, video and ads to post to your website and social media pages, and embed in emails. Personalize them by adding your logo.
  • Add the Promotional Products Work! twibbon to your social profile pic.
  • Round up self-promos and samples and donate them to a nonprofit in your community.
  • Advocate for the industry by participating in the PPAI Legislative Education and Action Day Virtual Fly-In.
  • Reach out and thank your customers.
  • Take lots of photos and share them using the hashtag #PPWWeek.
PPW Twibbon FB Ad Set 600x600

Add the #PPWWeek twibbon!

The fourth annual PPW! Week is focused on growing your business by educating the buyers of promotional products—your current and future customers. This international week-long event is focused on raising awareness of the benefits of promotional products among advertisers, marketers and media buyers.

Our goal is to increase our share in the media buy by enabling a deeper understanding of promotional products as an advertising medium among buyers, as well as sharing the benefits of working with certified promotional products professionals.

Thank you for your commitment and dedication to this great and growing industry. It is through your individual and cumulative efforts that we succeed—every day.

Paul

For more information or questions, contact PPW! Week program manager, Kim R. Todora at KimT@ppai.org.

PPAI’s Legislative and Advocacy Work – The Power of an Industry Voice

If you’ve had your eye on industry social media or recent industry news, you may have read about the pending launch of a new membership-funded industry lobbying group. I’ve been tracking the comments of dozens of engaged industry professionals supporting PPAI’s legislative and advocacy efforts and have had dozens more direct emails and calls looking for an official PPAI response.

It is unlikely I will gather the thoughts and opinions of our 11,000+ member companies (representing more than 500,000 industry practitioners) in a timely enough manner to respond to the “I want an answer now” social media climate. Rather, I will offer what I know to be true about PPAI’s efforts in this area, and I welcome your comments and suggestions in this broader, interactive format.

For longer than I’ve been associated with PPAI, we’ve had a strong, industry-driven and collaborative lobbying presence in Washington, D.C. From the beginning, PPAI’s lobbying efforts have focused on the core issues related to independent contractors, tax reform and small business, as well as industry-critical issues we identify as we monitor thousands of bills on a day-to-day basis. We continue to invest heavily in this strategic initiative. This is in addition to our ongoing and significant efforts to increase understanding and acknowledgement of promotional products as key branding tools that help advance brands, and to position promotional consultants as strategic partners and trusted advisors.

As a result of our reputation and long-standing presence in D.C., we are a sought-after coalition partner. As an industry that represents advertising, media and marketing, as well as manufacturers, importers, resellers and decorators, we are able to strategically align with partners who focus on specific issues, including the Small Business Legislative Council, the American Advertising Federation, the Association of National Advertisers, the American Alliance for Innovation, the Partnership to Protect Workplace Opportunity, the Coalition to Save Local Businesses, the National Association of Manufacturers, and many more.

Our government relations work is built upon a firm foundation of industry engagement from the smallest to the largest members—including engagement by the Advertising Specialty Institute’s (ASI) senior management on PPAI’s Government Relations Action Council and our Legislative Action and Education Day (L.E.A.D.). I mention ASI here because they have been an increasingly engaged colleague in our legislative efforts and, in my view, seem to be receiving some undeserved scrutiny for running the recent story.

Thanks to these engaged stakeholders, PPAI has a well-oiled machine in place. From our D.C.-based lobbyist’s boots on the ground, to L.E.A.D. at the federal, state and local level, to the ‘virtual fly-in’ digital advocacy (more than 7500 industry emails to legislators) as part of our Promotional Products Work! Week efforts, to our dedicated government relations team—we make sure federal and state lawmakers understand the value, economic contributions and employment opportunities offered by this vital and growing industry. As part of our mission to grow and protect the industry, we—PPAI, together with its expansive and engaged constituency—continuously educate members of Congress—at their D.C. and home offices—and other government entities on the value of the industry.

I will continue to respond to individual member inquiries regarding the potential launch of a new legislative advocacy group, letting them know that while I am pleased to see that the prospective group’s agenda is consistent with PPAI’s long-standing efforts in this arena, it would be unfortunate if any industry effort was divided or diluted as a result of two separate efforts.

The irony isn’t lost on me that I am posting this blog as I sit in the Small Business Legislative Council (SBLC) board of directors meeting in Washington, D.C. This group influences legislative and federal policy issues related to the small business community, and thus directly impacts our industry. PPAI’s standing seat on the SBLC board assures us a driving force on the relevant legislative agenda.

To learn more about PPAI’s advocacy efforts, I encourage everyone to visit the PPAI LAW website and take the opportunity to become more engaged in these efforts so that we can all protect and grow this industry to which we owe so much.

Want to talk about it? You can call our Director of Public Affairs, Anne Stone, at 972.258.3041, or me directly at 972.258.3050.

PPAI Responds to The Oklahoman’s Report on State Spending on Promotional Products

Oklahoma Take Action: Tell your officials and representatives that you support responsible spending and the effective use of promotional products to promote essential government programs – and urge them to do the same.

Write your representatives now.

The Oklahoman MastheadA few days ago, The Oklahoman editorial board published the article, “In attacking Oklahoma state budget hole, every little bit of savings helps,” on wasteful government spending on promotional products.

PPAI answered the report with a response supporting responsible spending and the effective use of promotional products to promote essential government programs. Thus, allowing readers to consider the facts for themselves.

I encourage you to write your representatives to share how extensive industry research demonstrates that promotional products deliver the highest rate of reach, recall and response making them one of the most effective advertising and marketing media for all advertisers, including federal, state and local governments.

Thank you for your support.

Paul

PPAI Responds to ABC Chicago’s Report on Government Spending on Promotional Products

Take Action: Tell your members of Congress that you support responsible spending and the effective use of promotional products to promote essential government programs – and urge them to do the same. Write your representatives now.

 

Last week, ABC affiliate WLS-TV Channel 7 aired an investigative report, “I-Team Treasure Hunt Turns Up Millions In Taxpayer Funded Trinkets,” on wasteful government spending on promotional products, which targeted a local PPAI member.

PPAI answered the report with a response, which ABC 7 agreed to post on their website, supporting responsible spending and the effective use of promotional products to promote essential government programs. Thus, allowing viewers to consider the facts for themselves.

I encourage you to write your representatives to share how extensive industry research demonstrates that promotional products deliver the highest rate of reach, recall and response making them one of the most effective advertising and marketing media for all advertisers, including federal, state and local governments.

Thank you for your support.

Paul

Inside PPAI’s 2013 North American Leadership Conference & Product Safety Summit | A special message from PPAI Chair, Marc Simon

NALC 2013: Perspectives on the Promotional Products Industry presentation.

NALC 2013: Perspectives on the Promotional Products Industry presentation.

On August 11-15 in Chicago, PPAI hosted two of our most popular and powerful educational opportunities—North American Leadership Conference and Product Safety Summit. Over the course of four-and-a-half days, we were treated to a series of superb speakers who shared countless years of experience on hotly relevant topics from innovation, marketing and the economy to product recalls, FDA regulations and social compliance—to name just a few. For PPAI’s Chair of the Board Marc Simon, it was also a thrill to hold these two exceptional events in his hometown. Below, Marc shares a special message with you.

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Greetings to our valued members!

For those of you who attended PPAI’s North American Leadership Conference (NALC) and/or PPAI’s Product Safety Summit (Summit) in Chicago earlier this month, I want to thank you, on behalf of the PPAI Board of Directors and staff, for your enthusiastic and attentive participation. Based on the comments we have received, it is fair to say that NALC and Summit were enormous successes.

If you were unable to attend either conference, let me tell you what you missed.

First, a few numbers: We had more than 150 participants at NALC and more than 180 participants at Summit. Notably, these were largely different groups of people. More frequently, senior management attended NALC and a combination of senior execs and people responsible for product safety and compliance attended Summit. Approximately 300 people in total participated in various aspects of this great week.

There were two themes to these back-to-back conferences: content and volunteerism. Let me explain.

For both conferences, we recognized that everyone’s most valuable resource is his or her time. We needed to be certain that we used everyone’s time judiciously. Both NALC and Summit participants heard from recognized experts who were impressive and even entertaining.

Gary Shapiro, CEO of the Consumer Electronics Association (CEA), was NALC’s first speaker. Gary made the point that innovation is critical for an industry, for a company, indeed for an individual, to survive and prosper. He observed that innovation is cultural and spoke of the many ways in which the culture and diversity of the United States breeds innovation. He contrasted that with other cultures, including China. It was ironic that the CEO of CEA, the bastion of technology—which is often blamed for limiting human interaction—spoke of the importance of relationships, face-to-face experiences and five-sense experiences to build trust and confidence, which are the essential ingredients of innovation. Gary’s presentation gave reason for encouragement—innovation is cultural (our culture), and relationships remain vitally important.

Next, Northwestern University Professor Frank Mulhern led us through the evolution of advertising from the presumed monolithic, homogenous state in which we know what consumers want and where consumers are captive to where we are today and where we are headed. Brands are shifting from products and services to people and lifestyles. Content marketing is everything, and “earned” media is growing rapidly. Marketing is becoming organized by interests, and people connect based on shared interests. As a result, marketing is becoming more analytical and targeted. (And therein lies the reason our industry will continue to grow. What can be more targeted and analytically based than our solutions?) Also, gamification is growing in popular appeal, another trend that favors our industry.

Our most knowledgeable, interesting and entertaining NALC speaker highlighted Tuesday’s lineup. Austan Goolsbee was previously chairman of the White House Council of Economic Advisors and is now a University of Chicago professor. He made three key points: 1. The economy is in for another 12 to 24 months of sluggishness, 2. The government is not going to help, and 3. Pent-up demand, the most productive work force in the world and our culture of innovation and entrepreneurialism will eventually push through all the clutter to lead us to new economic heights. I could not possibly do justice to the wit, humor and delivery style Goolsbee displayed, but we all laughed at the unintended consequences of lasagna and plumbing bombs (ask someone who attended for the details) as well as the observation that no one ever died jumping out of a basement window. Goolsbee spoke for an hour and took questions for another half hour. The universal comment we all heard was, “I could have listened to him all day.”

Product Safety Summit speakers included a panel of brand-integrity officers representing three of the world’s most valuable brands—The Coca-Cola Company, The Walt Disney Company and John Deere— speaking to the challenges and goals they face every day. Directors from the Consumer Products Division of Underwriters Laboratories gave a primer in the product safety requirements our industry faces.

It was a huge honor to have Neal Cohen, U.S. Consumer Product Safety Commission Small Business Ombudsman, as one of Summit’s keynote speakers. He spoke to the special considerations that exist in our laws and regulations to account for the practical limitations of small businesses. John Fuson, most recently the U.S. Food and Drug Administration’s associate general counsel for major enforcement actions, was fascinating as spoke of the practical requirements to which our industry’s food and drug niche (including hand sanitizers, for instance) is subject. Another government speaker, Jim Joholske, the assistant executive director of the Office of Import Surveillance for the CPSC, gave insights into new laws and regulations that our people now encounter every day. His interest in helping our industry was obvious—especially as he told listeners that if they couldn’t resolve an import issue, they were welcome to reach out to him for help.

The big hit of the outside expert Summit speakers was Katherine Cahill, an independent consultant. She spoke about the responsibilities that arise when product recalls are indicated. Her session, scheduled for 90 minutes, ran over by a full hour, as no one was willing to leave the room. She was filled with practical advice and everyone got a lot from her session.

Now for the second theme: volunteerism. None of this would have been possible without the tireless efforts and painstaking attention to detail from several PPAI members who volunteered their time to make this event so valuable for all of us—and each of these people has a full-time, demanding job outside of PPAI volunteer responsibilities.

We owe a great debt of gratitude to Gene Geiger, CEO of Geiger, and to Rick Brenner, CEO of Prime Resources, for their passion and commitment in personally attending to each and every detail of the Product Safety Summit. I also want to recognize CJ Schmidt of Hit Promotional Products and Marc Held of Bodek and Rhodes for their exceptional work as co-leaders of the NALC Work Group. Jonathan Isaacson, CEO of Gemline, had to have spent 100 hours doing the research, analyzing the results and putting together his highly informative NALC presentation on trends that are apparent on the supplier side of our industry. NALC presentations by Larry Cohen, CEO of Axis Promotions, on how suppliers can work more effectively with distributors and by Jeff Meyer, CEO of Certified Marketing Consultants, on mergers and acquisitions were just two of the many sessions that were both interesting and valuable. Thank you also to those peers who shared their valuable insights on a series of panels that explored relevant topics throughout both conferences. A final and personal thank-you goes to the dozen large distributor and supplier companies that quietly sponsored Austan Goolsbee’s appearance.

I was very proud to have my hometown show so well to all of our participants. Next August (August 10-12, 2014, and August 13-14, 2014, respectively), we are going to Boston, and the prospect of interacting with professors from Harvard and MIT is at least as exciting. So please join us!

Marc Simon
PPAI Chair of the Board

For session summaries, photos and a video Q&A with Austan Goolsbee, visit http://ppblive.tumblr.com.

 

 

Guest Blog: George Jackson, Legislative Chair of TRASA, shares his L.E.A.D. experience.

PA Group with Rep Tim Murphy

L.E.A.D., Legislative Education Action Day, sponsored by PPAI, is a unique experience. In April, I was able to attend my fourth L.E.A.D. experience. Each year they are similar, yet different. Attending meetings on the “Hill” in Washington, D.C. with your Member Of Congress and/or their staff is an exciting and challenging event.

This year I was again in charge of Team PA (Pennsylvania), and we had 13 scheduled meetings and 10 drop-in meetings. One of the challenges that you face each year is keeping the MOC and their staff in your corner. We have met with several MOCs and staff members from year to year and they remember us. This is what we strive for, them remembering who we are and what we do as well as their stating to us that they will keep on the lookout for legislation that could have a negative effect on the promotional products industry; a small yet meaningful victory for L.E.A.D.

Take the independent contractor issue as an example. Four years ago, very few if anyone even knew what we were referring to. We continue to discuss this issue each year we attend L.E.A.D. This year, after four trips, we came away with both MOCs and staff not only knowing the details of the issue, but now we are able to depend on their support on this issue if it comes up in either chamber. They now understand more about the PP Industry, the large number of small businesses that are it’s makeup and the impact that could result. Another small victory for PPAI.

This year we were invited to a senator’s AM coffee. The senator and staff are there to meet and greet with you and discuss briefly, issues that affect your industry. It is a way for the senator and his staff to meet with many people in a short period of time. We were again able to garner support on industry issues from this meeting.

L.E.A.D. is an event that strengthens your resolve towards the leaders in Washington, D.C. and proves that a small group of individuals can band together, meet with a MOC or staff from almost all 50 states and accomplish something important. We are a small group, which needs to grow, yet a mighty one. The PPI is an $18 billion industry that is slowly making inroads at both the federal and state government levels to ensure the protection of our members.

PPAI supports all of the Regional Associations’ Legislative Committees across the USA and brings them together with other volunteers at L.E.A.D. Even with this we need your help and support. Plan to join PPAI at L.E.A.D. in 2014. Attend an education class at Expo, Expo East, or at your local regional trade show, on government relations, legislative and/ or consumer product safety. This is your industry and it needs your help and support to keep it viable and productive.

Thank you,
George Jackson
Legislative Chairman, TRASA

The Washington Report- Marketplace Fairness Act

Marketplace Fairness Act Targets Out-Of-State Sellers

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.

Legislation has been introduced that addresses a long-standing debate over the collection of sales and use taxes from consumers by out-of-state sellers for the states in which those consumers reside.

The Marketplace Fairness Act, introduced in the Senate as S. 336 and in the House as HR 684, reflects several states’ acceptance of the Streamlined Sales and Use Tax Agreement (SSUTA) in 2002. The SSUTA is essentially a multi-state agreement to simplify national sales tax laws by establishing a uniform system of administering and collecting sales tax on out-of-state retail transactions—these transactions alone add up to several trillion dollars.

The SSUTA was approved in 2002 by a vote of representatives of 33 states and the District of Columbia. That number currently stands at 44 states.

The effort as it is being implemented by participating states is known as the Streamlined Sales Tax Project (SSTP). Twenty-four states representing more than 33 percent of the nation’s population have adopted the simplification measures set forth in the SSUTA by passing legislation that conforms to the agreement.

Under the SSUTA, member states are allowed to require remote sellers to collect and remit sales-and-use taxes after 90 days. The legislation exempts sellers who make less than $1 million in total remote sales in the year preceding the sale; they qualify for an exemption and would not be required to collect the tax.

States that do not want to become SSUTA members would only be allowed to collect sales and use taxes on out-of-state transactions if they adopted certain minimum simplification requirements and if they provided sellers with additional notices on the collection requirements, which are similar to but less comprehensive than SSUTA member conditions.

Sales And Use Tax History

The legislation’s history dates back more than four decades. Under the structure of state taxation, sales and use taxes are imposed on the consumer. The obligation on the seller, if any, is to collect and remit the tax. While the sales tax is the component collected by a seller on a transaction occurring within the state, the use tax is essentially a fictional component created to capture the tax made on out-of-state sales.

The purchaser is obligated to pay the use tax on any goods or services bought out of state and used in the state. Theoretically, the purchaser is always obligated to pay either the sales tax or the use tax. But few purchasers voluntarily pay the use tax and it is impossible to enforce compliance on a purchaser-by-purchaser basis.

A state can force a seller to collect sales tax since it has jurisdiction over the seller and can use leverage—such as the seizure of assets—to force compliance. If the seller has a facility in the state, the question of jurisdiction is easily resolved. In the case of an out-of-state seller, determining whether the seller has sufficient contact with a state to warrant collecting use tax from an in-state purchaser has been disputed long before the Internet became a marketplace.

In-State Presence

In National Bellas Hess v. Illinois Department of Revenue (1967), the Supreme Court ruled that states could not collect a sales or use tax from a firm that did not maintain a retail outlet within the state’s boundaries. In legal parlance, the company had to have “nexus,” or a connection with the state, upon which the state could claim jurisdiction.

In 1992, the Supreme Court decided the Quill Corp. v. North Dakota case involving a North Dakota statute drafted to specifically circumvent National Bellas Hess case. The North Dakota statute was drafted to define nexus to include “regular or systematic solicitation of a consumer market.” Regulations further defined this as three or more advertisements within a 12-month period.

Justice Stevens, speaking for the Supreme Court, said: “We do not share [North Dakota’s] conclusion that the ruling of Bellas Hess is no longer good law.” The Supreme Court, however, did make an observation that is essential to understanding the significance of the Streamlined Sales Tax Project agreement and possible federal legislation on nexus: “Our decision is made easier by the fact that the underlying issue is not only one that Congress may be better qualified to resolve, but also one that Congress has the ultimate power to resolve. No matter how we evaluate the burdens that use taxes impose on interstate commerce, Congress remains free to disagree with our conclusions.”

The Marketplace Fairness Act is the proponents’ answer to this suggestion.
The following states have passed legislation to conform to the SSUTA:
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; Wyoming

The lead sponsors of the Marketplace Fairness Act are:
Sens. Mike Enzi (R-WY); Dick Durbin (D-IL), Lamar Alexander (R-TN); Heidi Heitkamp (D-SD)
Reps. Steve Womack (R-AR); Jackie Speier (D-CA); Peter Welch (D-VT); John Conyers (D-MI)

Additional co-sponsors of the legislation:
House of Representatives
Aaron Schock (R-IL); Dennis Ross (R-PA); Chris Gibson (R-NY); Steve Cohen (D-TN);
Mario Diaz-Balart (R-FL); Judy Chu (D-CA); Ander Crenshaw (R-FL); Chellie Pingree (D-ME);
Renee Ellmers (R-NC); Allyson Schwartz (D-PA); Don Young (R-AK); Keith Ellison (D-MN);
Ted Poe (R-TX); Ted Deutch (D-FL); Rick Crawford (R-AR); Linda Sanchez (D-CA);
Michael Grimm (R-NY); Niki Tsongas (D-MA); Charlie Dent (R-PA); Hank Johnson (D-GA);
Mark Amodei (R-NV); Michael Capuano (D-MA); Mike Conaway (R-TX); Betty McCollum (D-MN);
Kristi Noem (R-SD); John Larson (D-CT); Lou Barletta (R-PA); James Langevin (D-RI);
Tim Griffin (R-AR); Eleanor Norton (D-DC); Suzan DelBene (D-WA).

U.S. Senate
Tim Johnson (D-SD); John Boozman (R-AR); Jack Reed (D-RI); Roy Blunt (R-MO);
Sheldon Whitehouse (D-RI); Bob Corker (R-TN); Mark Pryor (D-AR); Jay Rockefeller (D-WV);
Amy Klobuchar (D-MN); Al Franken (D-MN); Ben Cardin (D-MD); Dianne Feinstein (D-CA);
Mary Landrieu (D-LA); Joe Manchin (D-WV)