In late April of last year, the U.S. Senate proposed a permanent repeal of the use of the "Last-In, First-Out" (LIFO) inventory accounting method-an action that would translate into a massive tax increase for hundreds of thousands of American businesses. LIFO is an inventory accounting method used by companies throughout the U.S. economy to determine both book income and tax liability. Book income is the amount of earnings shown on business financial statements. Tax liability is the amount of income tax owed to the government.
The restricted use or outright repeal of LIFO is likely to have far-reaching and potentially damaging effects on any company within the professional beauty industry that relies on effective inventory management to remain profitable. Distributors, which by definition hold and maintain extensive inventories, could be seriously impacted by a loss of revenue through a largely increased tax burden.
LIFO repeal was apparently proposed in part due to a mistaken belief that LIFO is a “tax loophole” or that it is set to disappear from use. In fact, LIFO is an established, widely-accepted inventory accounting method that has been used by large and small companies throughout the U.S. economy since the 1930s.
Although the proposed repeal of LIFO was defeated last year, it is very likely that this topic will resurface – particularly given the increased pressure from Congress to close the federal "tax gap".
Background Information on LIFO Accounting
PBA is very interested in knowing how many of our member-companies use LIFO inventory accounting. Please contact Sam Leyvas, PBA's Government Affairs Director at 800-468-2274 x118.
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http://www.probeauty.org/
posted: sam leyvas
professional beauty association
7.09.2007
| Congress Considering Mandatory Paid Sick-Leave for Small Businesses
Sen. Edward Kennedy (D-Mass.) and Rep. Rosa DeLauro (D-Conn.) have reintroduced the "Healthy Families Act" (S.910/H.R.1542), which would require small businesses that employ 15 or more workers to provide each employee with seven days of paid sick leave. Both bills are currently being considered in committee, and Congress is expected to act on them later in 2007.
The legislation would require employers to provide paid sick leave for full-time employees to take care of themselves, a family member, or anyone else whose close association with the employee is the equivalent of a family relationship. The legislation would apply to employees who work 30 hours or more per week, but would also require prorated leave for part-time employees working between 20 and 30 hours per week.
Small-business owners worry that such legislation can be expensive, extremely rigid and in a lot of cases, unnecessary. According to an NFIB Research Foundation Small-Business Poll, small-business owners often successfully compete for employees on the flexibility they allow their workers. Moreover, a recent survey of salon/spa owners published by the Professional Beauty Association identifies employee recruitment and retention as the industry’s top challenge. This suggests that market pressures ensure that employers will continue to offer leave regardless of any legislative action.
Paid leave legislation is also being considered at the state level and is currently pending in Massachusetts, Maine, Minnesota, New Jersey and North Carolina. Similar legislation was defeated in Connecticut, Florida, Maryland and Minnesota.
PBA Salon/Spa Section's 10th Anniversary Survey Report
PBA members can email their elected officials on this issue by visiting PBA’s new online Advocacy Center.
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http://www.probeauty.org/
posted: sam leyvas
professional beauty association
The legislation would require employers to provide paid sick leave for full-time employees to take care of themselves, a family member, or anyone else whose close association with the employee is the equivalent of a family relationship. The legislation would apply to employees who work 30 hours or more per week, but would also require prorated leave for part-time employees working between 20 and 30 hours per week.
Small-business owners worry that such legislation can be expensive, extremely rigid and in a lot of cases, unnecessary. According to an NFIB Research Foundation Small-Business Poll, small-business owners often successfully compete for employees on the flexibility they allow their workers. Moreover, a recent survey of salon/spa owners published by the Professional Beauty Association identifies employee recruitment and retention as the industry’s top challenge. This suggests that market pressures ensure that employers will continue to offer leave regardless of any legislative action.
Paid leave legislation is also being considered at the state level and is currently pending in Massachusetts, Maine, Minnesota, New Jersey and North Carolina. Similar legislation was defeated in Connecticut, Florida, Maryland and Minnesota.
PBA Salon/Spa Section's 10th Anniversary Survey Report
PBA members can email their elected officials on this issue by visiting PBA’s new online Advocacy Center.
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http://www.probeauty.org/
posted: sam leyvas
professional beauty association
| Supreme Court Eases Barriers on Manufacturer Price Maintenance Agreements
On June 28th, the Supreme Court issued a ruling that now permits manufacturers to adopt so-called “resale price maintenance agreements”. The ruling has essentially reshaped a 96-year-old ban on manufacturers, distributors, and retailers setting price floors for products. In a 5-4 decision, the Supreme Court said that agreements on minimum prices are legal if they promote competition.
The Supreme Court ruled in 1911 that although manufacturers could suggest a retail price, federal anti-trust laws prohibited them from requiring minimum pricing agreements.
The Court’s latest decision was based on an appeal brought by Leegin Creative Leather, a luxury leather goods company in California. The company had been ordered by a lower court to pay close to $4 million in damages after it stopped shipping handbags to a Dallas-area retailer. Leegin’s stopped sending products to the retailer after it repeatedly discounted a popular line of handbags by as much as 20 percent. The retailer sued Leegin, arguing that he discounted the handbags to stay competitive and that losing the line – its best selling product – caused “permanent” damage to his business.
However, Leegin Creative Leather argued that a complete ban on minimum pricing agreements is out of step with modern economics. Leegin’s owner argued that his ability to set a minimum price is one of the few ways his company can actually establish its brand – particularly when compared with much larger corporations.
The Supreme Court, in it its traditional conservative and liberal split, agreed with Leegin’s arguments. With its ruling, the Court replaced the old antitrust standard that automatically assumed that minimum pricing agreements were illegal. Instead, the opinion authored by Justice Anthony Kennedy, creates a new rule that requires courts to do a case-by-case analysis on whether pricing agreements for a particular product violates federal antitrust laws. “Vertical agreements establishing minimum resale prices can have either procompetitive or anticompetitive effects, depending upon the circumstances in which they are formed”, Kennedy said.
The case is Leegin v. PSKS.
For more information, contact PBA's government affairs department at 800.468.2274 x118 or visit us online at http://www.probeauty.org/advocacy
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http://www.probeauty.org/
posted: sam leyvas
professional beauty association
The Supreme Court ruled in 1911 that although manufacturers could suggest a retail price, federal anti-trust laws prohibited them from requiring minimum pricing agreements.
The Court’s latest decision was based on an appeal brought by Leegin Creative Leather, a luxury leather goods company in California. The company had been ordered by a lower court to pay close to $4 million in damages after it stopped shipping handbags to a Dallas-area retailer. Leegin’s stopped sending products to the retailer after it repeatedly discounted a popular line of handbags by as much as 20 percent. The retailer sued Leegin, arguing that he discounted the handbags to stay competitive and that losing the line – its best selling product – caused “permanent” damage to his business.
However, Leegin Creative Leather argued that a complete ban on minimum pricing agreements is out of step with modern economics. Leegin’s owner argued that his ability to set a minimum price is one of the few ways his company can actually establish its brand – particularly when compared with much larger corporations.
The Supreme Court, in it its traditional conservative and liberal split, agreed with Leegin’s arguments. With its ruling, the Court replaced the old antitrust standard that automatically assumed that minimum pricing agreements were illegal. Instead, the opinion authored by Justice Anthony Kennedy, creates a new rule that requires courts to do a case-by-case analysis on whether pricing agreements for a particular product violates federal antitrust laws. “Vertical agreements establishing minimum resale prices can have either procompetitive or anticompetitive effects, depending upon the circumstances in which they are formed”, Kennedy said.
The case is Leegin v. PSKS.
For more information, contact PBA's government affairs department at 800.468.2274 x118 or visit us online at http://www.probeauty.org/advocacy
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http://www.probeauty.org/
posted: sam leyvas
professional beauty association
| Nail Manufacturers Council Educating Salon Professionals and Consumers
PBA's Nail Manufacturers Council recently published a comprehensive series of brochures aimed at educating consumers and professionals alike on health and safety issues. The brochues have been translated into several languages and are available online at www.probeauty.org/nmc.
The Nail Manufacturers Council (NMC), a subset of the Professional Beauty Association's manufacturer section, is made up of companies that produce nail care products. The NMC seeks to educate nail industry professionals and consumers about issues affecting nail care products and services.
The Nail Manufacturers Council (NMC), a subset of the Professional Beauty Association's manufacturer section, is made up of companies that produce nail care products. The NMC seeks to educate nail industry professionals and consumers about issues affecting nail care products and services.
For more information, please contact NMC Co-chairs Doug Schoon, Creative Nail Design at dschoon@cox.net or Eric Schwartz, OPI Products Inc. at erics@opi.com.
posted: sam leyvas
professional beauty association
| State & Federal Lawmakers Considering Action on Merchant Credit Card Fees
Nine states have introduced a total of 15 bills concerning the credit card interchange fees that cost U.S. merchants and consumers $36 billion last year, according to a survey of state legislative activity compiled by the Merchants Payments Coalition. Legislative proposals range from those that would prohibit card-issuing banks from charging interchange fees on the sales tax portion of a retail transaction to requirements that credit card companies fully disclose their rules and policies to merchants and consumers.
The interchange fee is a percentage of each transaction that credit card companies collect from merchants every time a credit or signature debit card is used to pay for a purchase. The fee varies with type of merchant, transaction and card, but averages close to two percent for most transactions. Visa and MasterCard interchange fees totaled $36 billion in 2006, up 17 percent from 2005 and 117 percent since 2001, according to some estimates. Visa and MasterCard do not disclose interchange fees on monthly statements, and their operating rules prohibit retailers from showing the charge on sales receipts.
Bills to ban interchange fees on the sales tax portion of transactions have been introduced in Florida, Kansas, Nevada, New York and Washington. Kentucky, Nebraska and Texas have introduced bills requiring credit card companies and issuing banks to be more transparent in disclosing rules and fees. Proposed legislation in Tennessee would cap interchange rates at 0.75 percent.
The U.S. House Judiciary Committee’s Antitrust Task Force is expected to hold a hearing on interchange fees this month. Members of Congress are expected to use the hearing to examine the impact of interchange fees on consumers and businesses as well as the antitrust law implications of the interchange fee system.
The hearing would be the fourth congressional session this year to examine credit card fees and the first to focus specifically on interchange fees. Last year, the Senate Judiciary Committee and a House Energy and Commerce Subcommittee held major hearings on whether interchange practices violate federal antitrust laws and the consumer protection impacts of the fees.
PBA members concerned about this issue can email their state and federal representatives using PBA's new "Find Your Elected Officials" page.
For more information, please contact Sam Leyvas, PBA's Government Affairs Director at 800.468.2274 x118.
posted: sam leyvas
professional beauty association
The interchange fee is a percentage of each transaction that credit card companies collect from merchants every time a credit or signature debit card is used to pay for a purchase. The fee varies with type of merchant, transaction and card, but averages close to two percent for most transactions. Visa and MasterCard interchange fees totaled $36 billion in 2006, up 17 percent from 2005 and 117 percent since 2001, according to some estimates. Visa and MasterCard do not disclose interchange fees on monthly statements, and their operating rules prohibit retailers from showing the charge on sales receipts.
Bills to ban interchange fees on the sales tax portion of transactions have been introduced in Florida, Kansas, Nevada, New York and Washington. Kentucky, Nebraska and Texas have introduced bills requiring credit card companies and issuing banks to be more transparent in disclosing rules and fees. Proposed legislation in Tennessee would cap interchange rates at 0.75 percent.
The U.S. House Judiciary Committee’s Antitrust Task Force is expected to hold a hearing on interchange fees this month. Members of Congress are expected to use the hearing to examine the impact of interchange fees on consumers and businesses as well as the antitrust law implications of the interchange fee system.
The hearing would be the fourth congressional session this year to examine credit card fees and the first to focus specifically on interchange fees. Last year, the Senate Judiciary Committee and a House Energy and Commerce Subcommittee held major hearings on whether interchange practices violate federal antitrust laws and the consumer protection impacts of the fees.
PBA members concerned about this issue can email their state and federal representatives using PBA's new "Find Your Elected Officials" page.
For more information, please contact Sam Leyvas, PBA's Government Affairs Director at 800.468.2274 x118.
posted: sam leyvas
professional beauty association
| PBA Scores on Capitol Hill; FICA Tax Bill Gains Powerful Allies
Rep. Shelley Berkley (D-Nev.) and Sen. Blanche Lincoln (D-Ark.) - two very influential members of Congress's tax writing committees - have agreed to champion the Small Business Tax Equalization & Compliance Act on behalf of the professional beauty industry. If adopted, the legislation would give salon and spa owners a dollar-for-dollar tax credit on the 7.65% FICA taxes paid on employee tips. The legislation would also help ensure the IRS's enforcement efforts focus on those who do not pay taxes, rather than on those who do.
"Rep. Berkley and Sen. Lincoln are longtime supporters of small business and our industry," said Steve Sleeper, PBA executive director. "Having them as primary sponsors bodes very well for our industry."
A small group of industry leaders from around the country recently met with key members of the House and Senate tax writing committees to garner support for the FICA Tax Credit bill. "These meetings come at a very strategic time," said Frank Zona, chairman of PBA's government affairs committee. "With so many new faces in Washington, it's extremely important that we educate policymakers on the importance and timeliness of this issue."
"This was my first time on Capitol Hill," said Scott J. Buchanan, owner of New York's Scott J. Salons & Spas. "My message to Rep. Charlie Rangel and others from New York was that this is a common sense issue that's long overdue." PBA members Kris Carpenter, Daired Ogle, Regina Webb, Andrew & Frank Zona, Serena Chreky and Scott J. Buchanan also met with Sen. Max Baucus (MT), chairman of the Senate Finance Committee, and Rep. Ron Lewis (KY) and Rep. Sam Johnson (TX), both of the House Ways & Means Committee, among others.
The timing and strategic focus of these Capitol Hill meetings are a part of PBA's larger emphasis on a stronger and more comprehensive government affairs effort. PBA members are encouraged to contact their members of Congress to ask them to sign on as co-sponsors of the Small Business Tax Equalization & Compliance Act.
Photo Gallery
To learn how you can get involved in future Capitol Hill visits, or for more information on this issue, visit PBA’s new online Advocacy Center or contact Sam Leyvas at 800-468-2274 x118 or sam@probeauty.org.
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http://www.probeauty.org/
posted: sam leyvas
professional beauty association
"Rep. Berkley and Sen. Lincoln are longtime supporters of small business and our industry," said Steve Sleeper, PBA executive director. "Having them as primary sponsors bodes very well for our industry."
A small group of industry leaders from around the country recently met with key members of the House and Senate tax writing committees to garner support for the FICA Tax Credit bill. "These meetings come at a very strategic time," said Frank Zona, chairman of PBA's government affairs committee. "With so many new faces in Washington, it's extremely important that we educate policymakers on the importance and timeliness of this issue."
"This was my first time on Capitol Hill," said Scott J. Buchanan, owner of New York's Scott J. Salons & Spas. "My message to Rep. Charlie Rangel and others from New York was that this is a common sense issue that's long overdue." PBA members Kris Carpenter, Daired Ogle, Regina Webb, Andrew & Frank Zona, Serena Chreky and Scott J. Buchanan also met with Sen. Max Baucus (MT), chairman of the Senate Finance Committee, and Rep. Ron Lewis (KY) and Rep. Sam Johnson (TX), both of the House Ways & Means Committee, among others.
The timing and strategic focus of these Capitol Hill meetings are a part of PBA's larger emphasis on a stronger and more comprehensive government affairs effort. PBA members are encouraged to contact their members of Congress to ask them to sign on as co-sponsors of the Small Business Tax Equalization & Compliance Act.
Photo Gallery
To learn how you can get involved in future Capitol Hill visits, or for more information on this issue, visit PBA’s new online Advocacy Center or contact Sam Leyvas at 800-468-2274 x118 or sam@probeauty.org.
---
http://www.probeauty.org/
posted: sam leyvas
professional beauty association
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