Posted on June 28, 2012
Independent jewelry retailers representing the Jewelers of America Political Action Committee traveled to Washington, D.C., last week to meet with lawmakers to discuss two key legislative issues: sales tax fairness and protection of the last in, first out accounting method, aka LIFO.
The June 20 trip marked the second consecutive year that members of JAPAC—the only political action committee that supports the fine retail jewelry industry—met with politicos on Capitol Hill to share their views on issues directly impacting the jewelry retail industry.
Jewelry retailers and JAPAC representatives Bill Farmer and John Henne; Congressman Steve Stivers; and jewelry retailers and JAPAC reps Jeff Corey, Jon Bridge, and Scot Congress at a JAPAC fundraiser in Washington D.C. last week. (Photo courtesy of Jewelers of America)
The group included Robert B. Headley, COO for Jewelers of America; Susan Thea Posnock, JA’s associate director of public affairs; and JAPAC board members and retailers Scot Congress (Congress Jewelers), Jeff Corey (Day’s Jewelers), Bill Farmer (Farmer’s Jewelers), Jon Bridge (Ben Bridge Jeweler), and John Henne (Henne Jewelers).
The delegation met with 26 members of Congress as part of a daylong agenda that included presentations from Republican and Democrat political consultants and two JAPAC fundraising events organized by JA’s D.C.-based legislative counsel, Haake & Associates.
Most of the jewelers met with a senator or congressional representative from their respective state, then convened for a group luncheon with various members of Congress.
Maine-based store owner Corey, who’s also JAPAC’s vice chairman of the board, met one-on-one with Maine Senator Susan Collins and a staffer for Olympia Snowe, another senator from his home state.
Corey talked to both parties about the Main Street Fairness Act, which seeks to level the playing field between online and brick-and-mortar retailers by enforcing state tax rates on e-commerce operations. In essence, customers looking for a tax break on that engagement ring you spent an hour introducing them to at your store would not be able to find it online, since their native state sales tax would automatically be imposed.
There are two sales tax fairness bills currently pending in Congress—one stating that state tax laws would be enforced for companies that net over $500,000 a year; and another stipulating a $1,000,000 income threshold.
“It used to be when we sold a $5,000 diamond we could make $1,500 or $1,000,” says Corey. “Today, because of the Blue Niles and other online sellers, the margins are much less than they used to be. Which makes the sales tax more of a factor.”
Though senators and representatives from both parties have signed on in support of the Main Street Fairness Act, resistance to the bill has surfaced because people are mistaking enforcement of existing tax laws, which state that consumers must pay and report taxes on goods purchased on the internet—only 1 percent do—with the introduction of new taxes. “All we’re saying is, let’s enforce this law,” says Corey.
Members of the PAC also advocated for LIFO, the inventory accounting technique that stipulates that the most recently produced items are recorded as sold first—reducing overall income taxes (LIFO is currently only legal in the U.S. and Japan).
Posnock, who sat in on several meetings with retailers and attended the event last year, says she felt like JAPAC’s messages were cutting through. Though no written commitments were made in support of its dual interests, the lawmakers “were even more familiar with the issues, and credited JA,” she says. “It felt like they were looking at them more closely and were following them more. Definitely progress was made.”
Politicians meet with political action committees because PACs pour money into the election funds of candidates they believe will best represent their interests. “Our PAC will support representatives who support issues that protect small business,” says Corey. “Part of our job is to figure out who gets the PAC money. But what an incredible education, to be there and experience the heartbeat of our nation.”
Corey’s father, a jeweler, taught him to engrave when he was just six years old, and the jewelry business “is really engraved on my soul,” he says. “I was very, very proud to have the opportunity to speak on behalf of Jewelers of America. It’s the American system at work.”