Marketplace Fairness; Is It All That Fair?
June 3rd, 2013 by EditorAs more and more tax-regulating legislation and proposals get tossed around in the door and window and building materials/lumber industries, here’s a look at several that could affect your company and what you need to know about them.
Marketplace Fairness Act of 2013: This proposed law, which will set up and enforce state tax on online businesses, has received bipartisan support and is meant to serve as a method solve the current competitive imbalance seen between online corporate giants, such as Amazon and Wal-Mart, and small business, brick-and-mortar shops. The legislation also aims to increase the amount of revenue brought in at the state level.
At a joint Window and Door Manufacturers Association (WDMA) and National Lumber and Building Material Dealers Association (NLBMDA) Spring Meeting earlier this year, Benn Gann, director of legislative affairs for the NLBMDA, told NLBMDA members, “Local retailers must collect sales tax at the time of purchase while out-of-state online retailers do not” which “distorts the marketplace and local companies are at a competitive disadvantage … The amount of online transactions keeps going up … This is costing states and localities billion in revenues. There is a need for a legislative solution … state governments are losing $23 billion annually.”
Innocent Sellers Fairness Act: This bill, which is considered dead but has been introduced multiple times to Congress, would aim to “prevent undue disruption of interstate commerce by limiting civil actions brought against persons whose only role with regard to a product in the stream of commerce is as a lawful seller of the product.” The bill would help to protect dealers from liability suits when selling unchanged products legally.
“Unfounded and unfair lawsuits are increasingly having a negative effect on the ability of building material dealers to run their businesses and contribute to their communities. More than one in four NLBMDA member companies has been named in a product liability lawsuit; 65 percent of those have been involved in more than one,” reads an NLBMDA statement.
Urban Enterprise Zone Program, New Jersey: At the state level, the Urban Enterprise Zone (UEZ) program, which is in effect in New Jersey, attempts to “foster an economic climate that revitalizes designated urban communities and stimulates their growth by encouraging businesses to develop and create private sector jobs through public and private investment,” according to the State of New Jersey Department of Community Affairs website. The program aims to achieve this revitalization by allowing certified UEZ businesses to have a reduced sales tax (3.5 percent), tax-free purchases on specific items, financial assistance, subsidized unemployment insurance, energy sales tax exemptions and tax credit options. Certified businesses must be registered in New Jersey, be located within one of 32 zones, be tax-compliant and certified by UEZ. Companies can register online.
So what’s your take? Think these “fairness” acts sound fair, or will they upset the balance of your business? Email Casey Neeley at cneeley@glass.com and share your thoughts on these programs.
Casey Neeley is the assistant editor of DWM magazine. She can be reached at cneeley@glass.com