It has been a busy year for Congress and the next year promises to be even more critical -- for legislators and businesses -- as the 2012 elections approach. In this high-stakes environment, Jewelers of America is tracking issues that could impact jewelry businesses while advocating on behalf of jewelry industry interests.
Our legislative counsel, Haake & Associates, offers the following insights:
Recent, hard-fought legislative victories -- like the repeal of the IRS 1099 regulation, the introduction of the Main Street Fairness Act in Congress and the continued protection of the last in, first out (LIFO) accounting method -- are temporary gains.
The jewelry industry will need to keep up the pressure to ensure sales tax fairness is passed and that LIFO is protected. Other key issues, like the extension of Bush-era tax cuts and a compromise on the estate tax, will also be up for debate again as the administration and Congress continue to look for ways to reduce the deficit and tackle tax reform.
Some key issues to watch that can affect jewelry businesses:
- The Main Street Fairness Act was introduced in Congress at the end of July, but it needs bipartisan support to move forward. We continue to engage legislators on both sides of the aisle and hope to see a bipartisan version of the Main Street Fairness Act introduced this fall. Jewelers can do their part by asking their representatives to co-sponsor the current bills, S.1452 in the Senate and H.R. 2701 in the House. Click here to take action.
- Repeal of the last in, first out (LIFO) accounting method, which JA opposes, remains in the crosshairs of both the administration and Congress. This year, the President included LIFO repeal in his budget once more and the provision was also considered during the summer debt limit and deficit reduction talks. While efforts to protect LIFO have prevailed, we believe repeal – which could raise an estimated $60 to $80 billion – will remain a hotly-contested issue as the Joint Select Committee on Deficit Reduction (“Supercommittee”), other members of Congress and the Obama Administration assess the viability of potential deficit-reduction measures this fall.
- Congress will continue to wrestle over budget issues and deficit reduction. The debt limit bill signed by President Obama this summer called for at least $2.4 trillion in spending cuts over 10 years. Of that, $900 billion in across the board cuts were enacted immediately. A bipartisan Congressional committee has been tasked with drafting a bill this fall that would create between $1.2 trillion and $1.5 trillion more in deficit reduction. A broad range of budget cuts and tax provisions will be on the table as this so-called “Supercommittee” works to fulfill its mandate.
- The 15-year leasehold improvement depreciation -- which allows store owners to recover their investment in improvements quicker and reduce cash flow -- expires again at the end of this year. JA supports extension of the provision and believes it should be made a permanent feature of the tax code.
For More Information
- See Jewelers of America’s updated Federal Legislation Guide for an overview of all the key issues we’re monitoring through the Fourth Quarter and into 2012.
- JA members should support our legislative advocacy efforts by contributing to JAPAC, Jewelers of America’s Political Action Committee.