In this week’s edition of Friday Facts, major issues to retailers:
- Finance Committee passes bill to increase permit fees.
- Escheating of unused gift cards is back in play.
- Other news and notes from the State Capitol.
Remember CRMA is YOUR Voice at the State Capitol. We lobby full-time for your interests and care ONLY about how legislative issues impact the retail industry.
Finance Committee passes bill to increase permit fees.
- Yesterday, the Finance Committee met for the last time this session and passed a big bill that would have an impact on all retailers in Connecticut.
- The Committee adopted HB 5046 AAC Revenue Items to Implement the Governor’s Budget. Included in that bill is a provision that wouldINCREASE the sales tax permit fee that retailers have to pay the state for the right to collect and remit sales tax
- Under the Committee’s bill, retailers who collect more than $4,000 worth of sales tax (monthly remitters) would see their annual permit fee go from $100 to $350. In addition, the fee would now be on a 2 year renewal rather than the 4 year renewal under the current law.
- The committee expects these changes to increase revenue to the state by $24 million dollars.
- CRMA is very disappointed in the committee’s actions and will continue to work hard to stop these increases from going into effect.
- There was one bit of good news in the revenue package for retailers, and that is the Committee added language to the bill that would phase out the luxury tax on watches and clothing over 4 years from its current rate of 7.75% to 6.35%. In addition, it reduces, over five years, the sales tax on boats from 6.35% to 3%.
- Finally, the bill exempts from sales tax feminine hygiene products, disposable or reusable diapers and coin operated car wash services.
- There is another provision in the bill that CRMA is very leery about and will keep working on with the committee. That provision involves a new requirement on “payment settlement entities” i.e., banks, credit card processors etc., to submit monthly informational reports to the Department of Revenue Services detailing the credit and debit payments they made to retailers in the prior month.
- We aren’t sure exactly why the Committee’s wants DRS to have this information, we suspect it has something to do with cracking down on delinquent sales tax remitters, but we are very concerned about privacy issues, given some of the personal information that the bill is asking for.
- This section of the bill is something we will have to keep a close eye on.
Budget issues remain
- You might ask why the Finance Committee is even considering raising any revenue after the record tax increases that have already been put in place by the Malloy administration over the past 5 years.
- Good question. The problem is those tax increases have simply not raised enough money to keep pace with the spending side of the budget - and therefore CT’s budget remains in deficit.
- The Appropriations Committee didn’t do the Finance Committee any favors in that regard this week when the day before Finance met, Appropriations adopted a budget that was still some $300 million out of balance.
- You can read more about the Appropriations budget attempt by going to our friends at the CT Mirror (here) and the Finance Committee action (here). Meanwhile Governor Malloy is preparing to present another mid–year budget to the full General Assembly soon. CT Mirror also has that story.
Gift Card issue heats up.
- Meanwhile, CRMA faces another threat to our bottom line, as proponents of changing CT’s gift law have raised the issue. Why they want to change it is beyond us. It is the best gift card law in the nation. No expiration fee – no escheating. Consumer’s win and retailers win.
- But, there are some in the Legislature, most notably State Rep. Pat Miller (D-Stamford) and State Rep. Matthew Lesser (D- Middletown) who upped the ante on the issue this week by filling an amendment that would require CT retailers go back to escheating unredeemed portions of the gift cards back the state.
- CRMA will fight this proposal, along with the idea that retailers should give cash back on unredeemed portion of the gift card.
- Escheating to the state is wrong and an intrusion into our business. The gift card was purchased by a consumer – it is their money, not the state of CT’s money, and our members should not be subject to having the Treasurer’s office auditing our business for that purpose.
- We will need your help in this effort, so please stay on alert for a notice from us on how and when to contact your State Rep. and State Senator to tell them to vote NO on this amendment.
Other news and notes from the State Capitol
- There is a special committee consisting of members of the legislature, business and industry and Malloy administration officials, who are looking into how to make CT more economically competitive.
- This Committee, called the Commission on Economic Competitiveness, held an important meeting on Friday to listen to recommendation by the McKenzie Group on where CT ranks in many important business categories, as well as where changes need to be made for CT to improve its competiveness to increase business.
- We will have more on what the Commission recommend in next week’s FF.
- Meanwhile, Governor Malloy made a pitch to Nissan to get them to move to CT after Mississippi passed an anti-LGBT bill. And he made a similar pitch to Levi Strauss, and to Bank of America after North Carolina’s recent legislation. No word from Nissan, but BofA said thanks, but no thanks.
- Our friend Chris Keating from the Hartford Courant has more on that. Go here for the story.
- Finally, the House and Senate will be back in action next week. The House has scheduled sessions for Tuesday, Wednesday and Thursday while the Senate has just announced a Tuesday session.
Tell us what is on your mind
- We always value your feedback on what is going on at the State Capitol.
- Send along your thoughts about any of the bills we mentioned this week or any other issues.
- Just email Cathy in the CRMA office at firstname.lastname@example.org