www.alabamaretail.org Volume 13, number 4

As of Jan. 1, transactions follow new local nexus rule — At the 32nd Annual Retail Day, Alabama A new regulation regarding local nexus Retail and UAB honored 13 outstanding that parallels the state nexus rule applies Alabama retail busi - nesses with operations in 72 Alabama to transactions in Alabama starting in 2014. cities and 31 states as Retailers of the Year or as Centennial Retailers. Under the new rule, a seller using its own delivery trucks and its own employees is responsible for collecting and remitting the — The Alabama applicable local tax. Legislature returns Jan. 14 with some If the seller uses a common carrier or the U.S. mail to new faces and some perform a delivery, provided the seller has “no vacancies. Alabama Retail will be there advancing its other contact” with the destination locality, Legislative Agenda. the seller does not have an obligation to — Alabama Retail calls collect and remit the local sales and use tax. on Congress to rectify The corresponding use tax may be owed the online sales tax by the purchaser/consumer. loophole before another continued on Page 10 holiday shopping season rolls around. Expect 2 percent Subcommittee focuses — Alabama’s severe growth in holiday sales on retail products for weather sales tax holiday returns Holiday spending should business license reform in February. Start A joint legislative subcommittee gearing up now. near $9 billion in Alabama. The Alabama Retail Association expects tasked with reforming Alabama’s cumbersome and confusing state — Eight years 2013 taxed holiday sales to reach $8.9 billion, in, Alabama’s back- at least 2 percent higher than the $8.7 billion and county business licensing to-school sales tax spent during November and December system has narrowed the scope of any holiday continues of 2012. If that prediction proves true, initial legislation to creating a single to produce results. Alabamians should spend almost $175 million business license for retail products and Sales tax collections grew almost more this holiday season than in 2012 repealing obsolete business licenses. The 3 percent in August even though on taxed purchases. committee is expected to draft legislation books, school supplies, computers and for possible introduction at the start clothes were tax free for three days Nationally, holiday sales are of the ’s 2014 during the month. expected to increase 3.5 percent to $602.1 billion. Last regular session in January. See year, holiday spending AlabamaRetail’sLegislative in Alabama declined a AgendaonPages8and9 . half percent compared Currently, the state of to Holiday 2011. Alabama issues 136 dif- Learn more about ferent kinds of business untaxed purchases licenses. Some are based on Page 2. more on Page 10 VOLUME 13, NUMBER 4 FOURTH QUARTER PUBLISHER: RICK BROWN EDITOR: NANCY KING DENNIS labama’s hometown, Main Street, Amom-and-pop, small retailers have one wish this holiday season: That the 201 2-2013 OFFICERS U.S. Congress closes the online sales tax CHAIRMAN: loophole. DIANNE WAMMACK Cameras Brookwood, Vestavia Hills Your Alabama Retail Association predicts VICE CHAIRMAN : Alabamians will make $8.9 billion in taxed GEORGE WILDER purchases in November and December The Locker Room, Montgomery and Auburn (SeePage1 ). PRESIDENT: RICK BROWN Consumers in our state probably will spend Montgomery as much as another $712 million this holiday VICE PRESIDENT: season with out-of-state, online-only retailers ALISON WINGATE who don’t collect sales taxes, based on 2012 Montgomery research done by professors at the University TREASURER: BOB AKERS of Alabama at Birmingham’s Collat School Davis Direct, Montgomery of Business. SECRETARY: That means hundreds of millions of VIRGIE TODD dollars will be spent by our citizens that Montgomery will not benefit the state of Alabama nor $6.8 billion in additional GDP and 21,732 IMMEDIATE PAST CHAIRMAN: new jobs. The 2012 study by Robert JIMMY RAY SMITH its retailers. It is past time for Congress Jimmy Smith Jewelers, Decatur to address e-fairness and end the online Robicheaux, Ph.D., chair of the Depart - sales tax loophole before another holiday ment of Marketing, Industrial Distribution shopping period rolls around. and Economics in the Collat School of Progress has been made this year toward Business at UAB and an Alabama Retail 2012-2013 OFFICERS that goal. In May, the U.S. Senate, includ - Association board member, said Alabama CHAIRMAN : ing Alabama’s senators Richard Shelby loses $2 billion in taxable sales to out-of- KEN HUBBARD and Jeff Sessions, approved the Market - state online retailers each year, resulting in Western Supermarkets, Birmingham place Fairness Act, which would level the the loss of as many as 4,000 jobs annually. TRUSTEES: DARRELL BOURNE playing field in regard to sales tax collec - Alabama needs Congress to pass the Mar - Ragland Brothers Retail Cos., Inc., Huntsville tion for most retailers. In September, the ketplace Fairness Act as soon as possible CAREY ROME House Judiciary Committee, including a to give states the ability to collect these Cypress Resources, Birmingham subcommittee led by Alabama’s 6th taxes online. JIMMY RAY SMITH District Congressman Spencer Bachus, Alabama Retail members have been on Jimmy Smith Jewelers, Decatur released its principles for remote sales tax the forefront of this debate for years and BUD SKINNER have communicated their support for e- Jubilee Seafood, Montgomery collection. Now, Congress needs to take fairness at every step in the process. Once CRAIG VINSON JR. swift action by drafting legislation based Granville Interiors LLC, Montgomery on these principles and passing the bill in again, please contact your congressional PHILLIP WEAVER the U.S. House of Representatives. representative and tell him or her that Buffalo Phi l’s, Tuscaloosa President Ronald Reagan's economist your holiday wish is that Congress levels FUND ADMINISTRATOR: FUND MANAGER: Art Laffer released a report earlier this the playing field in regard to sales tax RICK BROWN MARK YOUNG collection. Montgomery Montgomery year that said the potential economic ALABAMA RETAIL QUARTERLY is the official publication of the growth in Alabama by 2022 if the Market - Alabama Retail Association, 7265 Halcyon Summit Drive, Mont - Rick Brown: rbrown@ alabamar etail .org gomery, Alabama 36117-3502. Telephone (334) 263-5757; FAX place Fairness Act passes would be (334) 262-3991. ALABAMA RETAIL QUARTERLY is published four times a year. Views and conclusions expressed in articles herein are those of the authors, not necessarily those of the editors or officers of the Alabama Retail Association. Opinions expressed in this magazine New look for logos and website do not necessarily reflect the policies of the Alabama Retail Asso - ciation. Alabama Retail Association has spiffed up its brand over the past few months. You Advertising: Inquiries should be directed to the Alabama Retail As - may have noticed a new look for the logos for both the association and Alabama Retail sociation. Rates will be furnished on request. The Alabama Retail Association reserves the right to omit any advertising or Comp, which we will continue to phase in as we use up printed materials with the editorial copy deemed to be unsuitable for publication. Publication herein does not necessarily imply endorsement of any product or former logos. Now, we have a new website to match the updated look of our logos. service offered. Check it out at alabamaretail .org and tell us what you think. We did it all so you can Postmaster: Send address changes to ALABAMA RETAIL QUAR - TERLY , P.O. Box 240669, Montgomery, Alabama 36124-0669. better Benefit from the Value of your membership.

Alabama Retail Quarterly - FOURTH EDITION 2013 2 Localities have until Jan. 21 to join severe weather sales tax holiday For more information, go to: alabamaretail .org/alabamasalestaxholidays/ labama’s third severe weather customers or post them throughout your February 2 sales tax holiday runs from store to help your customers understand 1-23 A12:01a.m.Friday,Feb.21 , what is and isn’t sales tax free. N until midnight,Sunday,Feb.23 . During the February holiday weekend, O SALE S TAX! During that time, Alabama will waive shoppers don’t pay the state's four TH sales taxes on certain items needed to percent sales or use tax on purchases REE DAYS prepare for severe weather emergencies. of qualifying items: common disaster ONLY

In mid-November, the Alabama Retail supplies that cost less than $60 that Pay NO S a ales Tax o wide vari n: ety of eme rgency sup Association mailed documents to help every home and business needs to pre - x batte plies, ries; flash including: it lights; tarp ems for pr s; plywoo otecting w d and othe its members prepare for this potentially pare for an emergency; and generators and cool indows in r ers; ice pa storms; ic and cks; first e chests carbon dio aid kits; a x p xide detec nd fire, sm ortab tors ( oke revenue-boosting event, including: costing $1,000 or less. Alabama retailers le generat $60 or less ors and co per item) rds ($1,00 O 0 or less) ☛ apostertohelppromotethe must participate in the state's sales tax FFER GOO D ONL Y IN A This LABA informatio MA three-dayholiday . Even businesses that holidays and cannot charge any waived b n provided y THIS STO RE and th do not sell the tax-free items can benefit. sales taxes on the items that are legally e

www. For more alabamaret informati Stimulating sales and boosting the tax-exempt during the tax holiday. ail.org/alab on, go to amasalesta xholidays/ statewide economy is what sales tax Local governments can exempt their holiday weekends are all about. Place sales taxes as well, making the savings Retailers worked this poster in the front of your store or even greater and more enticing for the hard for passage of Alabama’s sales near the items that qualify for the tax consumer. City councils and county tax holiday laws. The popularity of tax exemptions. If you need more posters, commissions must approve the neces - holidays continues to grow. In the you can download and print the pdf sary ordinance or resolution by Tuesday, current economic climate, consumers version from the sales tax holidays page Jan. 21, to participate in the severe still need savings and an incentive on the Alabama Retail Association’s weather sales tax holiday. to spend. Alabama's sales tax holidays website. Tornado season runs from March give them both. Alabama Retail hopes ☛ aQuickReferenceSheetof to August in Alabama and hurricane the severe weather sales tax holiday ExemptItemsforthetaxholiday . season is from June to November. stimulates spending and, as the back-to- This is a perfect piece to place beside Having the tax holiday in February school sales tax holiday has shown ( see your cash registers. You might also want comes at an ideal time to stock up storybelow ), increases sales on taxed as to make copies to provide to your on emergency supplies. well as untaxed items. August sales up almost 3%; sales tax holiday improves overall sales labama rang up $4.23 billion GREATTRACKRECORD in total taxed sales in August, After eight years, Alabama’s back- Anearly 3 percent growth over to-school sales tax holiday continues August 2012. That is all sales, all month, to encourage taxed as well as untaxed sales. Our state has only seen a decrease not just on back-to-school spending. in tax revenue one August in the eight Those are the best sales numbers for an years the state has had the sales tax August in five years. holiday during the first full weekend The state collected $169.2 million in of the month. sales taxes even though many clothes, Ninth annual sales tax holiday Alabama sales generally represent computers, books and school supplies for school-related items 1.5 percent of all retail sales nationally. Nationwide, $72.5 billion was expected were tax free over one weekend. A 12:01 a.m. Friday, Aug. 1, 2014 to be spent on back-to-school shopping, record 281 cities and counties joined the to midnight Sunday Aug. 3, 2014 which means about $1.08 billion was state in waiving their sales taxes for the ☛ clothing priced at $100 or less spent to equip and outfit students in our three-day holiday, increasing the savings ☛ supplies valued at $50 or less state this year. books that cost $30 or less; and for consumers to as much as 10 percent ☛ The back-to-school season is the ☛ and computer equipment with a selling of their purchases. second-largest sales period for retailers price of $750 or less. after the winter holidays.

3 Alabama Retail Quarterly - FOURTH EDITION 2013 In-store experience is the competitive advantage for brick & mortar retailers, says Simply Fashion founder and COO he Barstein name as a retail force in Alabama goes back three Tgenerations. Russian immigrant Morris Barstein started out operating a fruit cart in downtown Birmingham. In 1955, he pooled resources with his uncle, Max Corenblum, to open War Surplus Stores, also in downtown Birmingham. “War surplus stores were at the beginning of many modern retail chains ,” said Rodney Barstein, grandson of Morris Barstein and the keynote At left, Alabama Retail President Rick Brown presents Rodney Barstein with a Simply Fashion speaker for the 2013 Alabama Retail Day proclamation from the govenror earlier this year; at right, Mark and Rodney Barstein in their Birmingham headquarters store in 2011. Day luncheon. In 1957, Mervyn Barstein, joined his "Brick-and-mortar retailers must father and great uncle in the family busi - evolve and enhance the one major ness that became known as Bargain advantage they have – the in-store Town USA to get “ merchandise to rural experience, " Barstein told those attend - Alabama ,” Mervyn’s son, Rodney, said. Featured ing the Alabama Retail Day luncheon “The first Bargain Town opened in on Oct. 8 in Birmingham. downtown Leeds ,” said the third-genera - Simply Fashion has been an Alabama tion retail entrepreneur. The discount Member Retail Association member since 1992 . variety merchandising store was the first Rodney Barstein is a former Alabama Retail to let customers shop for themselves, likes and communicates regularly with Association chairman (2000-2001) who rather than having merchandise behind a 160,000 customers through e-mail, said continues to serve as an active member of counter or under glass. Barstein, who serves as its chief operat - our association’s board of directors. He, his Bargain Town hired early local TV ing officer. brother, Mark, and the Janak Shah family stars, such as Country Boy Eddie and Barstein sees the perfect storm coming earned the 2011 Gold Alabama Retailer of Bozo the Clown, to promote its grand for brick-and-mortar retailers unless the Year award in the Annual Sales More openings, which Barstein said was a key they evolve and change. Than $20 Million Category. Rodney Barstein to the chain’s success. Twenty percent of purchasers say they was featured on the cover of the December Bargain Town USA grew to 60 stores regularly compare prices and purchase 2013 Business Alabama magazine. before the family sold it in 1987. from another retailer while shopping in The stores began operating as Simply 6 a store. That percentage goes up the among other names before the new younger the customer. The potential for owners’ business collapsed. a brick-and-mortar retailer to lose its In 1991, Rodney, his brother Mark, customer to a competitor in this manner and the Janak Shah family of Miami, is nearly two-thirds among Generation Fla., bought Simply 6, brought it out of X, those between the ages of 33 and 53, bankruptcy and began operating the Barstein said. chain of clothing stores as Simply "For brick-and-mortar stores, the Fashion Stores Ltd. in-store experience is the competitive For more on Retail Day, see Pages 6 and 7. Now in its 23rd year, Simply Fashion advantage ," said Barstein. “ Most execu - For more on Simply Fashion, go to operates 250 stores in 22 states and tives know what a well merchandized simplyfashion.com employs 1,500 associates with 15 stores store looks like, but they know very Left photo by Hal Yeager Photography, Birmingham; and more than 165 associates in Ala - little about what a quality experience Right photo provided. bama. The chain has 24,000 facebook looks like ,” he added.

Alabama Retail Quarterly - FOURTH EDITION 2013 4 Federal health care 2013 ALABAMA CENTENNiAL RETAiLER delays continue Birmingham Barons Birmingham n Alabama and the 35 insurers. Small businesses Iother states where the federal have been able to apply for Founded in 1885 government is running health exchange coverage by paper Owners: Birmingham Barons LLC insurance exchanges, small application since Oct. 1. businesses won’t be able to use Individuals have until Dec. 23 The Birmingham Barons LLC is one of the most historic and celebrated franchises in minor league baseball. 2013 marked its 114th season of baseball the healthcare.gov website until to sign up for health coverage in Birmingham and the Barons’ 129th year of existence. The Barons’ history dates November 2014. that takes effect Jan. 1. Those to 1885 when the team was known as the Coal Barons. The team won its first Small businesses with 50 who have not signed up for Southern Association championship in 1906. On Sept. 15 of this year, the team or fewer full-time workers are insurance by the end of March won its latest title, the Southern League Championship. BaseballParks.com eligible to use the exchanges will have to wait until the 2015 named Regions Field, which opened April 10, as Ballpark of the Year. The to buy health coverage through open enrollment period: Nov. Southern League named the Barons as Organization of the Year and General brokers or enroll directly with 15, 2014 - Jan. 15, 2015. Manager Jonathan Nelson as Executive of the Year. Legislature has new members; more slots to be filled ince April, four new members have Sjoined the Alabama Legislature: 2014 SPECIAL ELECTIONS CALENDAR ☛ Former Montgomery County Commis - Vacancies exist in Alabama House Districts 31, 53 and 104. if your business is in these districts, make certain these dates sioner and restaurateur Dimitri Polizos, are on your calendar and that you are communicating with your employees and customers about the 2014 special elections. For more, see Elections in the Advocacy section of alabama retail .org . R-Montgomery, was sworn in Dec. 5 as the representative for the House Jan. 17 Voter registration deadline for March 14 Voter registration deadline House Districts 31, 53 and 104 for House Districts 31 and 53 District74 seat vacated by Rep. Jay Love, Jan. 23 Absentee ballot applications due March 20 Absentee ballots due R-Montgomery, who now serves as for three vacant House districts for House Districts 31 and 53 finance chairman for the nonprofit Jan. 27 Completed absentee ballots due March 24 Completed absentee ballots due Business and Education Alliance. for three vacant House districts for House Districts 31 and 53 March 25 House Districts 31 and 53 ☛ Since June 6, Mobile Housing Board Jan. 28 Primary Runoffs House Districts 31 and 53 General Election executive and book store owner Adline House District 104 General Election Clarke, D-Mobile, has occupied the House District97 seat vacated by the death Polls open 7 a.m. - 7 p.m. of Rep. Yvonne Kennedy; shuttle service owner and tween attorney Arthur Shores Lee and ☛ HouseDistrict11 Rep. , Democrat Stephen Carr, a high school Anthony "Alann" Johnson, executive R-Fairview, former director of the music teacher, a children’s therapist and a director of Leadership Jefferson County, Cullman County Commission on Aging, disaster recovery and response expert, will will face Republican real estate broker was sworn in April 11 for the seat face off Jan. 28 to determine who will W.A. “Willie” Casey in the March 25 formerly held by Jeremy Oden, R-Eva, replace Barton. General Election to fill the seat vacated by who was appointed to fill an Alabama ☛ HouseDistrict31 : Rep. Barry Mask, the September death of Rep. Demetrius Public Service Commission vacancy; and R-Wetumpka, resigned in September Newton, D-Birmingham. The winner will have to run in a different district in the ☛ As of April 2, business consultant Bill to devote his full attention to his job as June/November election cycle as District Hightower, R-Mobile, has occupied the chief executive of the Alabama Associa - 53 moves to the Huntsville area under the SenateDistrict35 seat, which Ben tion of Realtors. , former latest redistricting plan. Brooks, R-Mobile, vacated to become a chairman of the Elmore County Republi - Mobile County circuit judge. can Executive Committee, and Ford The winners of all of the 2013 and early dealership co-owner Jimmy Collier face 2014 special elections will have to stand As in 2013, the Alabama Legislature for election again beginning June 3, 2014, will start its 2014 regular session with each other in the Jan. 28 Republican Party primary runoff. No Democrat qualified with the primary ballot. All 140 legislative three legislative vacancies: seats will be on the ballot in 2014 under a to seek the office, but at press time the ☛ HouseDistrict104 : Rep. Jim Barton, new district map, which the Legislature Secretary of State was evaluating a peti - R-Mobile, resigned in August to join approved in 2012 and the U.S. Justice Kinney Capitol Group, a governmental tion to add a Constitution Party candidate Department approved five months later. affairs and lobbying firm that has a to the March 25 General Election ballot. At press time, a lawsuit challenging the contract with the Alabama Retail ☛ HouseDistrict53 : The winner of a districts as racially discriminatory awaited Association. Cab company and airport Jan. 28 Democratic primary runoff be - a ruling by a federal three-judge panel.

5 Alabama Retail Quarterly - FOURTH EDITION 2013 13 retailers honored during 2013 Retai ore than 200 retailers, academics and students gathered Simply Fashion Store Day in honor of our keynote speaker, MOct. 8, for the 32nd Annual Retail Day to celebrate all Rodney Barstein, a founder and the chief operating officer of things retail. The Alabama Retail Association and the University Simply Fashion. See story Page 4 . of Alabama at Birmingham Collat School of Business recognized Retailers of the Year must operate or manage a retail business 13 of Alabama’s top retail businesses with locations in 72 Ala - in Alabama and that business must collect state and local sales bama cities as Retailers of the Year or as a Centennial Retailer taxes. To be a Retailer of the Year, businesses must have been (See story, Page 5 ). Together, these businesses employ more than operating for at least five years to qualify. Gold Retailers of 17,000 and have been in business for an average of 52 years. Gov. the Year can only be recognized once within a sales category. All Robert Bentley declared Oct. 8 as Alabama Retail Day and other winners can be nominated in subsequent years. Once 2013 alabama reta annual SaleS more tHan $20 million annual SaleS $5 million to $20 million

Jeff Rosenthal, Jan Clevenger and Mark McCutcheon Ken Hubbard, Lucy Buffett, Dale Smith and Darwin Metcalf GOLD AWARD : GOLD AWARD : Jan Clevenger , Belk Inc. , Western Division, Birmingham Lucy Buffett , LuLu’s , Gulf Shores "It is terrific for Belk to have a presence in Alabama," said Belk's “I feel so blessed,” said Lucy Buffett, owner of LuLu’s in Gulf Western Division Chairman Jan Clevenger. "We are absolutely Shores. “I created a company that I would want to work for, that thrilled to be here." provides a great experience, great food, great merchandise and great service. ... It is all about the experience at Lulu’s. I try to

SILVER AWARD : make people happy. That has worked for me.” Jeff Rosenthal, Hibbett Sports , Birmingham SILVER AWARD : BRONZE AWARD : Managers and Associates, Western Supermarket – Mountain Brook Mark McCutcheon, Golden Flake Snack Foods , Birmingham

emerging retailer oF tHe Year Jen Barnett, Freshfully , Birmingham “There is a part of retail that is just as important as a local school or community center,” said Jen Barnett of Freshfully, Alabama’s 2013 Emerging Retailer of the Year. “I don’t think kids are going to grow up one day and remember shopping with their Mom on Amazon the way that I remember shop - ping with my Mom at Pizitz or Watkins Book Shop (in Roebuck) or with my Grandmom at Bargain Town in Oneonta.”

Alabama Retail Quarterly - FOURTH EDITION 2013 6 il Day; 2014 nominations due May 19 Alabama Retail receives a nomination, the nominee is sent a complete entry form to be used in the judging process. Nomi - nations for the 2014 Retailer of the Year awards are due by Monday, May 19, 2014 . Since 2012, in memory of the late Alabama Retail board mem - ber and UAB professor Mickey Gee, the Gee Emerging Retailer of the Year Award has gone to an innovative and effective Ala - bama retailer who has been in business for at least two years, but less than five years. ailerS oF tHe Year annual SaleS $1 million to $5 million annual SaleS leSS tHan $1 million

Dorothy McDaniel, Van Sykes and Georgia Ziglar. From left Barbara Patton representing Stacie Money; Mark Thompson, Deanna Hawkins and Jamie Pursell; Marco, Elan and and Nora Morosini. GOLD AWARD : GOLD AWARD : Van Sykes , Bob Sykes Bar B Q Restaurant , Bessemer “I couldn’t accomplish anything without the support of family, Stacie Money , Fringe , Opelika and Auburn community and staff,” said Van Sykes, owner of Bob Sykes Bar B SILVER AWARD : Q Restaurant. “Thanks especially to Bob and Maxine Sykes, founders of Bob Sykes Bar B Q, and born retailers.” Marco and Elan Morosini , Silvertron Café , Birmingham BRONZE AWARD SILVER AWARD : : Dorothy McDaniel , Dorothy’s McDaniel’s Flower Market , Managers and Employees, Leaf & Petal , Mountain Brook Homewood “Our philosophy this year has really been love,” said Mark Thompson, manager of the Mountain Brook Leaf & Petal. BRONZE AWARD : ”To love our customers, love our employees, love our store and Georgia Ziglar, Ziglar Inc. , Troy our merchandise. That has really been the heart and soul of our growth.“

Want to nominate a Retailer of the Year or Centennial More photos from Retail Day can be found on Alabama Retail’s Retailer? Go to Awards at www. alabamaretail .org facebook page under 2013 Alabama Retail Day

Learn more about these Retailers in the News section View UAB COLLAT School of Business photos on flickr under of alabamaretail .org Alabama Retail Day 2013 . Photos by Hal Yeager Photography, Birmingham

7 Alabama Retail Quarterly - FOURTH EDITION 2013 2014 STA TE L E On Dec. 6, the Alabama Retail Association board of directors approved this legislative agenda for the 2014 regular session of the Alabama Legislature. During the session, Alabama Retail will monitor all bills with the potential to impact retailers. Check your e-mail inbox for weekly updates on legislative action in your weekly Capitol Retail Report. If you are an Alabama Retail member who is n’t already on our e-mail distribution list and would like to receive the Capitol Retail Report, send your e-mail to ndennis@ alabamaretail .org . tHe alabama retail aSSoCiation SuPPortS: GENERAL BUSINESS ☛ legislation to RAISE the average monthly SALES ☛ legislation to SIMPLIFY AND STREAMLINE TAX LIABILITY THRESHOLD for businesses. the current BUSINESS LICENSE SYSTEM . ☛ creation of the ALABAMA TAX APPEALS COMMISSION as an independent state tax agency headed WORKERS’/UNEMPLOYMENT COMPENSATION by a judge with specific training in the area ☛ legislation designed to REDUCE FRAUD of state and local taxation. This legislation should also in WORKERS’ COMPENSATION and abolish the Administrative Law Division of the Alabama UNEMPLOYMENT COMPENSATION . Department of Revenue. ☛ finding solutions to medical cost issues, including ☛ the ALABAMA TAXPAYERS’ BILL OF RIGHTS II , consideration of CHANGES TO THE WORKERS' an updated expansion of landmark legislation first enacted COMPENSATION MEDICAL FEE SCHEDULE in 1992, which extends the appeal deadlines for taxpayers. and evaluation of the NEED FOR AN OUTPATIENT SURGERY FEE SCHEDULE .

TAX Alabama Retail supports ending the ☛ legislation to LEVELIZE SALES/USE TAX unfair tax advantage Internet and collection and remittal between BRICK-AND-MORTAR catalog retailers have over hometown, brick-and-mortar retailers. RETAILERS and those that are INTERNET and/or CATALOG-BASED .

2014 LEGISLATIVE CALENDAR

The Alabama Legislature meets each year for 30 days within 105 calendar days. In a typical week, our Legislature usually convenes Tuesdays and Thursdays for “legislative days,” reserving Wednesdays for committee meetings.

Tuesday, January 14 : 2014 Regular Session Begins TO CONTACT MEMBERS OF THE ALABAMA LEGISLATURE March 24-28 : Legislative Spring Break WRITE: Alabama State House, 11 S. Union St., Montgomery, AL 36130 (Tentative dates of Alabama Legislature recess.) CALL : HOUSE: (334) 242-7600 SENATE: (334) 242-7800 Monday, April 28 : Sine Die ONLINE : alabamaretail.org/findyourlawmaker/ (Last possible day the Legislature can meet in regular session. it may adjourn earlier.) If you wish to visit with your lawmakers at the Alabama State House, please call ahead for an appointment.

Alabama Retail Quarterly - FOURTH EDITION 2013 8 EGISLATIV E AGEN DA For more on these and other issues, Alabama Retail members can go to State Issues in the Advocacy section of www. alabamaretail .org alabama retail oPPoSeS: alabama retail GENERAL BUSINESS will monitor ☛ EXPANSION OF STATE UNEMPLOYMENT COMPENSATION BENEFITS and/or amend : that result in increased taxes ANY LEGISLATION on Alabama business. ON THESE SUBJECTS

☛ “CUSTODIAL TAKING ” ☛ changes to the legislation that pushes unused gift- workers’ compensation card balances to the state treasury Alabama Retail opposes statute. when those balances go unclaimed. “custodial taking” of unused gift card balances. ☛ electronics (E-waste) ☛ Restrictions on the normal USE OF CUSTOMER INFORMATION recycling. obtained in the regular course of business. ☛ changes to Alabama’s ☛ MANDATORY EMPLOYEE BENEFITS AND WAGES . price-gouging statute.

☛ TAXING OR BANNING PLASTIC BAGS . ☛ alterations to taxes paid on groceries. LEGAL ☛ legislation to eliminate or restrict CONTRACTUAL ☛ proposals to move Medicaid to a managed care ARBITRATION AGREEMENTS . system. ☛ any changes to the current ELECTION PROCESS FOR APPELLATE JUDGES . ☛ changes to pharmacy payments by Medicaid. WORKERS’/UNEMPLOYMENT COMPENSATION ☛ attempts to implement an Alabama healthcare ☛ any ATTEMPTS TO WEAKEN Alabama’s status as a insurance exchange. RIGHT-TO-WORK STATE . ☛ changes to Alabama’s product liability laws. TAX ☛ BAND-AID or QUICK-FIX TAX SCHEMES or singling ☛ campaign finance reform proposals. out one particular industry or segment of business for punitive tax increases. Alabama Retail vehemently opposes any patchwork tax ☛ restrictions to the efforts. sale of any products, especially: ☛ required UNITARY COMBINED REPORTING for corporate taxpayers. • tobacco • alcohol PHARMACY/HEALTH ☛ making PSEUDOEPHEDRINE available • printed or recorded by PRESCRIPTION ONLY materials • video games ☛ MANDATORY HEALTHCARE BENEFITS that can further increase the price of healthcare coverage. ☛ MANDATES ON THE PRICE for which retailers can SELL PRESCRIPTION DRUGS . ☛ RESTRICTIONS ON the SUBSTITUTION OF GENERIC or BIOSIMILAR DRUGS and PRODUCTS . You can view this agenda online under Agenda in the Advocacy section of www. alabamaretail .org

9 Alabama Retail Quarterly - FOURTH EDITION 2013 As of Jan . 1, transactions follow new local nexus rule continued from Page 1 sales taxes on its sales delivered into Huntsville customers and delivers the The new regulation creates seller re - those localities. supplies sold to Huntsville customers sponsibility to collect and remit local RetailerB , a sporting goods store into Huntsville via UPS, a common car - sales or use tax by imposing the same with its location in the City of Birming - rier. Because RetailerC has a physical standards applicable for determining ham (Jefferson County), makes sales to presence (salesmen) in Huntsville (Madi - whether a seller is obligated to collect customers in Gulf Shores (Baldwin son County), it is responsible for collect - and remit state-level sales and use County) and delivers the goods sold to ing and remitting the Huntsville and tax. Gulf Shores customers into Gulf Shores Madison County sales taxes on its sales The new rule provides three exam - via UPS, a common carrier. RetailerB delivered into those localities. ples to help retailers determine when has no other contact with Gulf Shores or State sales tax would still have to be their businesses are required to collect Baldwin County. Because RetailerB collected and remitted in all of the above and remit local (county and city) sales lacks a physical presence in Gulf Shores examples. Local sales tax rates will be and use taxes: (Baldwin County), it is not responsible available via an iPhone app and on the RetailerA , a furniture store with for collecting and remitting the Gulf Revenue Department’s website by Jan. 1. its location in the City of Montgomery Shores or Baldwin County sales tax on Remitting sales and use taxes became (Montgomery County), makes sales to its sales delivered into those localities. much easier as of Oct. 1 customers in Auburn (Lee County) However, the customer would be re - when the state and delivers the furniture sold to sponsible for remitting any applicable activated its ONE SPOT Auburn customers into Auburn using use tax to Gulf Shores and Baldwin system. If you haven’t its own delivery trucks and its own County. yet explored how employees. Because RetailerA has a RetailerC , a janitorial supply store going to ONE SPOT physical presence (delivery trucks and with its location in the City of Mobile to remit state and employees) in Auburn (Lee County), (Mobile County) and with salesmen so - local taxes can save it is responsible for collecting and re - liciting sales in the City of Huntsville you time and hassle, go to mitting the Auburn and Lee County (Madison County), makes sales to revenue.alabama.gov/salestax/one_spot.cfm Subcommittee focuses on retail products for business license reform continued from Page 1 The goal is to develop one, flat-fee at the specifics of system design, opera - on the type of business (occupational), retail products license that will be rev - tion and function. some are regulatory and others origi - enue neutral for both state and county The subcommittee has agreed to ex - nate with the product being sold. Local revenues. Revenue generated from state clude counties with their own licensing governments also can require busi - business licenses is split evenly between systems provided by local law from the nesses to buy licenses to operate. the state and county governments. Initial changes being discussed in this reform The Business License Reform Sub - estimates are that the flat rate license effort. committee, chaired by Sen. Slade would need to be in the $65 to $75 While the subcommittee also has opted Blackwell, R-Mountain Brook, wants range. not to reform business licenses required to decrease the types of business li - The committee also has discussed in - by municipalities in this effort, members censes issued by the state. The origi - cluding a mechanism in the legislation to expressed a desire to develop an advisory nal goal is to eliminate any license adjust the rate for the license after one group to look specifically at municipal that relates strictly to the type of year if it doesn’t generate the same level business licenses for future reform. product sold. Right now, Alabama re - of revenue as does the current hodge - Blackwell, who originally sponsored a tailers have to buy separate licenses if podge of product-based licenses or if the business license reform bill in the 2013 they sell soft drinks, calculators, play - rate produces more revenue than is cur - regular session, and Rep. , ing cards, magic equipment, radios, rently being generated. R-Decatur, the House sponsor, both said glass and animal hides among many The reform being discussed also in - the subcommittee’s work is moving busi - other items. For instance, each grocery cludes an online filing system to be im - ness license reform in a positive direc - or convenience store may be required plemented in phases sometime after the tion for the first time since the to have to up to 15 different licenses, retail product license has been imple - Legislature first began discussing such depending on the product assortment mented. An advisory committee would reform in 1996. available at that store. be created immediately to start looking

Alabama Retail Quarterly - FOURTH EDITION 2013 10

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Participants to get largest return ever; $6.5M+ marks decade of return growth

Alabama Retail Comp RetRospective RetuRn experience versus the experience of the DistRibution foR 2014 fund as a whole. The amount of credit a will return more than participant receives is tied directly to the ARC’s $6.5 million-plus retrospective return for 2014 $6.5 million to qualified will be distributed from fund years as follows: business’s loss ratio. Lower losses mean a higher retrospective credit at renewal. participants in 2014, 2012 $1,000,000 This acts as an incentive for participants an amazing 20percentmorethanlast 2011 $1,000,000 to provide a safe work environment. year’sreturn . The retrospective return is 2010 $1,000,000 Alabama Retail Comp, the state’s the largest in the fund’s 29-year 2009 $1,000,000 most stable, cost-effective workers’ history and represents the 10th straight 2008 $500,000 compensation insurance program year of return growth. 2007 $500,000 for retailers, is regulated by the Alabama The 2014 retro-return will be distributed Department of Labor and governed to participants as a credit on their premium 2002-2006 $1,589,290 by a board of trustees who are fund contribution for 2014. The annual return total 2014 Return $6,589,290 participants. Almost 4,000 ARA can represent as much as a 20 percent Sinceitsinceptionin1984,ARChas members participate in the fund. to 30 percent credit toward a partici - returnedMORETHAN$57MILLION– ARC specializes in the retail industry, pants’ contribution. 21percentofallpremiumscollected – to but also provides coverage to an array “We are pleased to once again bring its participants through its retrospective of business employers. some good economic news to our return plan. The plan provides a controlled Fund Manager Mark Young said, members by providing this retro return, method for the fund to return excess “At ARC, our goal is simple: To provide which will help lower the costs of doing funds accumulated due to favorable the most cost-effective workers’ business, ” said Rick Brown, the fund’s operating experience. The retrospective compensation coverage to Alabama administrator and the association’s presi - rating plan uses an actuarial formula that businesses with unparalleled customer dent. takes into account individual participants’ service. ”