November 18, 2005
IN THIS ISSUE:
Time Change For Ad Valorem Inventory Tax Hearing
Request For Input From Governor Perdue (Repeat)
Hearings Set On HB 351, Clarifying The Collection Of Sales And Use Taxes
Suit Filed Over Credit Card Exchange Rate
Increased Georgia Sales Tax Placed On Back Burner
Bioterrorism Rules Updated
Retail Sales Remain Strong
Smoke-Free Regulations Kick-In
Final Ad Valorem Tax Hearing Time Change
The third and final hearing on HR 486 – the Ad Valorem Tax Study
Committee will be held on Wednesday, November 30, 2005 at 6:00 PM (new time)
in Room 111 of the Coastal Georgia Center, 305 Fahm Street, Savannah, Georgia.
FROM I-16 East
1. Exit on Martin Luther King, Jr. Blvd. - LEFT off exit
2. Continue straight past Visitors Center
3. Turn LEFT @ traffic light onto Oglethorpe Street
4. Turn LEFT @ traffic light - Fahm Street
5. Straight 2 blocks - dead ends into Coastal Georgia Center (parking to the
right)
6. It is very important that we have a strong showing at this final hearing.
Please let me know if you will be able to attend.
Small Business Regulatory Reform Committee
Governor Perdue Would Like Your Input
Georgia’s Governor, Sonny Perdue has established the Governor’s
Small Business Regulatory Reform Initiative (GSBRRI). The initial work of the
GSBRRI is being accomplished by a small group of appointees whose goal is to
identify the unique burdens that small businesses have in complying with state-level
rules and regulations. The task force is especially hoping that you might be
able to identify regulations or regulatory processes which are of specific concern.
Ultimately the work of GSBRRI should lead to a process that will reduce problematic
rules and regulations.
The questions below are designed to provide input to the process. Please take
time to complete and return the survey to me at johnh@georgiaretail.org. When
responding to the questions, please keep in mind that they are not addressing
rules and regulations of the Federal, city or county governments. In addition,
this initiative is primarily focused on easing compliance with Georgia State
Government rules and regulations, and generally not on the continued existence
of a rule or regulation.
Business Name:
Contact Name:
Contact Title:
1. How many employees do you have currently?
2. Is State regulatory reform in any way part of your current priorities? If
yes, what are the issues?
3. Have you ever calculated what the impact of complying with State regulations
has on your business? If so, would you share that information?
4. A major focus of regulatory reform is to identify opportunities to make it
easier to comply with regulations by removing complexity, simplifying forms,
and reducing paperwork. If you could aim improvement efforts in one direction,
what should we work on first?
5. The GSBRRI hopes to identify and fix outdated, redundant, unnecessary and
confusing rules. Are you aware of any problems like this that affect your business?
6. Are you aware of a State regulatory process that results in licensing, permitting,
or some type of approval where the length of time required to get a decision
is a major problem for your business?
7. Are you aware of any situations where a State regulation is in conflict or
disharmony with Federal or local regulation?
8. Which compliance process could best be improved by using the internet to
provide better access to information, electronic submission of reports, etc?
9. State agencies may be asked to establish an ombudsman program. This would
provide one or more people dedicated to help business with regulatory problems.
Which agency could best make use of this approach and why?
10. The committee hopes to include input directly from small businesses. Currently
two methods are being considered, either a) public meetings held around the
state, and/or, b) a web-based survey. Would you be willing to respond to either
of these processes? If yes, in which format would you be more likely to participate?
Hearings Set on HB 351, Clarifying the Collection of Sales and Use Taxes
Two hearings will be held, on Monday, November 28th at 2:00 PM and
Tuesday, November 29th at 10:00 AM in Room 133 of the State Capitol, on HB 351.
This bill restates Part 2 of Article 1, Chapter 8 of Title 48 of the Official
Code of Georgia Annotated. It is a clean up bill designed to clarify the section
(f)(1).
The existing language:
Every Person purchasing or receiving any service within the state,
the purchase of which is a retail sale, shall be liable for tax on the purchase
at the rate of 4 percent of the gross charge or charges made for the purchase.
The tax shall be paid by the person purchasing or receiving the service to the
person furnishing the service. The person furnishing the service, as a dealer
under this article, shall remit the tax to the commissioner as provided in this
article; and, when received by the commissioner, the tax shall be a credit against
the tax imposed on the person furnishing the service. Every person furnishing
a service, the purchase of which is a retail sale, shall be a dealer and shall
be liable for a tax on the sale at the rate of 4 percent of the gross charge
or charges made for furnishing the service, or the amount of taxes collected
from the person to whom the service is furnished, whichever is greater.
The proposed language:
The tax shall be paid by the person purchasing or receiving the service
to the retailer selling the service. The retailer, as a dealer under this article,
shall remit the tax to the commissioner as provided in this article: and when
received by the commissioner, the tax shall be a credit against the tax imposed
on the person selling the service. Every person selling a service, the purchase
of which is a retail sale, shall be a dealer and shall be liable for a tax on
the sale at the rate of 4 percent of the sales price of the service, or the
amount of taxes collected by him or her from the person to whom the services
are sold.
Please let me know if you have any issues with the proposed change.
Suit Filed Over Credit Card Exchange Rate
In an amicus curiae brief filed on November 10, 2005, the Food Marketing
Institute (FMI) and Retail Industry Leaders Association (RILA) urged the U.S.
Supreme Court to reject an request from Visa to create an antitrust safe harbor
allowing Visa and MasterCard to continue to fix credit and debit card interchange
fees with their owner/member banks.
The case in point, Texaco v. Dagher, et al, involves joint price setting in
a Texaco and Shell Oil Company joint venture. If the Court were to endorse the
broad antitrust immunity sought by Visa in its own amicus filing, the decision
could undermine more than 40 pending cases, including class actions, challenging
the fees under Section 1 of the Sherman Act.
FMI and RILA allege that credit card companies and their member banks set interchange
fees with no regard for the merchants and, ultimately, the consumers who pay
them. The fees have increased steadily over the past 10 years. In 2004, Visa,
MasterCard, and their member banks collected more than $26 billion in interchange
fees, according to FMI.
Visa, in its brief supporting the oil companies, argues that its (and MasterCard's)
practice of having their member banks collectively fix the price of interchange
on every debit and credit transaction should be immune from challenge under
Section 1 of the Sherman Act.
FMI and RILA told the court that the fees are nothing more than "blatant
exercises of market power ... and continue to increase at enormous cost to merchants
and consumers.
Update
on Bioterrorism Regulations Available
FDA has issued the 2nd Edition of the BT Act Establishment and Maintenance
of Records Questions and & Answers. The Questions and Answers are available
at http://www.cfsan.fda.gov/~dms/recguid2.html and can also be found on FDA-CFSAN
website "FDA Actions on New Bioterrorism Legislation" at http://www.cfsan.fda.gov/~dms/fsbtact.html
under Establishment and Maintenance of Records.
Retailers Experience Another Strong Month
Retailers experienced another strong month as October sales rose 7.2%.
And if those October’s sales are any indication, companies are in store
for a very happy holiday. According to the National Retail Federation (NRF),
retail industry sales for October (which exclude automobiles, gas stations,
and restaurants) rose a strong 7.2 percent unadjusted over last year and increased
1.1 percent seasonally adjusted from the previous month. September sales were
also revised upward, from 7.0 percent year-over-year growth to 7.2 percent growth.
In Georgia, October sales and use tax collections were up 13.5%, demonstrating
that the State’s economy was tracking well as compared the nation as a
whole.
October retail sales released on November 15th by the U.S. Commerce Department
showed that total retail sales (which include non-general merchandise categories
such as autos, gasoline stations and restaurants) dipped 0.1 percent seasonally
adjusted from September, largely due to sluggish automobile sales, but increased
5.6 percent unadjusted year-over-year. Gasoline sales, which NRF does not include
in its calculation of retail industry sales, rose 26.7 percent unadjusted from
last October.
Nearly every retail industry category saw strong sales last month, including
building material and garden equipment and supplies stores, which saw sales
rise 2.1 percent adjusted from September and a whopping 14.1 percent over last
year. Other home categories that experienced growth included furniture and home
furnishings stores, whose sales increased 8.5 percent over last year, and electronics
and appliances stores, with a 6.5 percent increase in sales over last October.
Additionally, strong year-over-year gains were seen at clothing and accessories
stores (7.2%), health and personal care stores (7.3%), general merchandise stores
(6.9%), and food and beverage stores (5.2%).
Retail industry sales are expected to increase 5.6 percent this year over 2004.
Holiday sales, which are defined as retail industry sales in the full months
of November and December, are expected to rise 5.0 percent to $435.3 billion.
Smoke-Free Regulations Kick-In
The smoke cleared this week as the rules governing the enforcement
of Georgia's smoking ban took effect. The measure passed in March, was signed
by Gov. Sonny Perdue in May and took effect July 1. But the state waited until
the annual Great American Smokeout, November 17th to activate the guidelines
to be used to interpret the law.
The measure prohibits smoking in most enclosed public places. However, an exemption
was added as it made its way through the General Assembly that lets restaurants
and bars permit smoking if they don’t serve or employ anyone under 18.
The new rules, adopted by the Georgia Board of Human Resources last month, make
it clear that any “smoke-free’’ public place must prohibit
smoking 24 hours a day.
Other rules require businesses to post signs indicating whether they allow smoking
and stipulate where those signs should be placed. They also require businesses
that permit smoking to restrict the puffing to separate rooms with their own
ventilation systems.
The rules establish penalties for violators, whether those scofflaws are smokers
or businesses.
Finally, they give local governments the leeway to keep or adopt anti-smoking
ordinances that are stricter than the state law. But not all local governments
are taking advantage of that flexibility.
In fact, the Gwinnett County Commission recently repealed its stricter ordinance
to adopt the provisions of the state law.
Rockdale County and Conyers didn’t go quite that far in abandoning their
local ordinances, but they did adopt the over-18 exemption for bars and restaurants
contained in the state’s smoking ban.
The state Division of Public Health has launched a Web site to educate Georgians
about the new law and encourage them to quit the habit. The site is located
at http://www.livehealthygeorgia.org.
Thank you.
John C. Heavener, MSM, CAE
President
johnh@georgiaretail.org
Telephone – 770-484-3449, ext. 21
Fax – 770-484-5727
Georgia Retail Association
About GRA: The Georgia Retail Association, with membership that comprises
all retail formats and channels of distribution including department, specialty,
discount, catalog, Internet, independent stores, and grocery stores has been
serving the state’s business community since 1961. The Georgia Retail
Association represents an industry with more than 71,300 retail establishments,
and more than 715,000 employees - about one in five of Georgia’s workers
- and 2004 sales of $115.2 billion.