January 27, 2000
Volume 5, Number 1

At a much anticipated meeting of the NRF Board of Directors, Board members overwhelmingly adopted a policy position calling for state sales and use tax equity across all retail channels. “NRF believes all retailers, regardless of the channel or channels in which they do business, should be treated equally with respect to collection obligations currently required by state sales and use tax laws,” said NRF President Tracy Mullin.

“NRF believes that tax policy should be channel neutral,” Mullin added. “Equal collection obligations merely levels the playing field for retailers and their customers.

Historically, NRF has remained neutral regarding expanded collection obligations for remote sellers. However, the extraordinary increase in Internet sales, coupled with the creation of a Congressional panel to evaluate taxation of the Internet, required NRF to reevaluate its position. NRF will now work with Congress, the States, and the Administration to develop fairer and more equitable state sales and use tax systems.

For further information, please contact Scott Cahill or Sarah Whitaker at 202-783-7971.

With most of the East Coast weathering the worst snowstorm in recent years, this week the Senate renewed its consideration of S. 625, the "Bankruptcy Reform Act." Debate began late Wednesday morning, with votes on remaining amendments scheduled to begin on February 1.

Negotiations have been ongoing since the end of last session on a handful of controversial amendments. On Monday, Senate Majority Leader Trent Lott proposed to withdraw a scheduled cloture petition, which limits debate on a measure, if Democrats agreed to limit debate on all remaining amendments, including two controversial Democratic proposals relating to bankruptcy filings by gun manufacturers and abortion clinic attackers.

“We did lock in an agreement as to how to go forward, what amendments would be considered and voted on,” Lott said. “I think it’s important that we now try to finish that legislation.”

Two potentially harmful amendments are among those awaiting consideration. One, offered by Senator Russ Feingold (D-WI), would overturn arbitration programs established by retailers as part of their credit card programs. The second, offered by Senator Tom Harkin (D-IA), would greatly expand the category of secured household goods a debtor could keep despite filing for bankruptcy. NRF opposes both of these amendments.

Should work on the legislation be completed, the measure is expected to pass by a large margin. However, it still faces a difficult House-Senate Conference and a possible Presidential veto. The House passed a stronger bill, which NRF prefers, last year by a 313 to 108 vote.

NRF asks that you contact your Senators and urge them to support S. 625, the Bankruptcy Reform Act. Senators can be reached through the Capitol Switchboard at (202) 224-3121.

If you have any questions, please contact Mallory Duncan or Katherine Graham at (202) 783-7971.

As Members return for the second session of the 106th Congress, free traders and protectionists are gearing up for the biggest trade fight of the year: permanent Normal Trade Relations (PNTR) status for China.

Shortly before the World Trade Organization (WTO) Ministerial in Seattle last December, an accord was reached between China and the United States that helped clear the way for China’s membership in the WTO. However, for the U.S. to fully realize the benefits of China’s membership, the yearly battle over NTR status for China must end. President Clinton said that achieving PNTR status for China is a priority this year, and has sent a letter to Congress expressing his desire for an early vote on the issue.

In the wake of the contentious WTO Ministerial, opponents of trade with China feel they are primed to defeat PNTR status and force China to adopt reforms before joining the WTO.

China has been trying to join the WTO for thirteen years. The deal with the U.S. is essential to this goal, but the Chinese must still negotiate bilateral trade deals with a number of other WTO members, including the European Union. Assuming the remaining talks lead to Chinese entry to the WTO, China would be held to internationally recognized and enforceable trade standards.

NRF, along with the rest of the business community, is preparing to work diligently to win PNTR status for China and smooth the way for China’s eventual membership in the WTO. “China’s accession to the WTO would provide countless benefits to U.S. and American consumers,” said Erik Autor, NRF’s International Trade Counsel. “It allows for cheaper imports of products, and forces China to accept internationally recognized trading standards.” Recently, the NRF Board of Directors unanimously passed a resolution calling on Congress to provide PNTR status to China.

The vote is expected sometime this spring. NRF urges you to contact your Representative and ask them to support permanent Normal Trade Relations status with China. A sample letter is available on NRF’s website at www.nrf.com/govt.

If you have any questions, please contact Erik Autor at (202) 626-8104.

Under cover of the Congressional break, the Clinton Administration, through the Department of Labor (DOL), released proposed regulations expanding the Family and Medical Leave Act (FMLA) in December. The new rules would allow state agencies to offer Unemployment Compensation (UC) to employees who take a leave of absence due to the birth or placement of an adopted child. Employees on leave under the FMLA would simultaneously be able to collect unemployment insurance.

House Republicans were quick to condemn the move. In a letter to President Clinton from House Ways and Means Chairman Bill Archer (R-TX), the Chairman said the decision “pits out-of-work Americans against their neighbors who have jobs. This is simply wrong.” The letter went on to state that the UC program was intended to be used only in cases of “involuntary unemployment,” and not voluntary leaves of absence.

The DOL has requested public comments on the proposed rule be submitted by February 2. NRF has drafted comments to be submitted. If you would like to see a copy of NRF’s comments or have any additional questions, please contact Katherine Graham at (202) 626-8195.

The lawsuit pending between Visa and MasterCard and NRF and other retailers has been slowly moving forward. NRF and the retail industry have claimed that the credit card companies have used monopoly power to dominate debit cards and force retailers to pay exorbitant transaction fees. The retail community is seeking $8.1 billion in damages.

Recently, U.S. District Judge John Gleeson rejected attempts by Visa and MasterCard to postpone the trial date and approved a government request to intervene.

February 9, 2000 - Health and Employee Benefits Committee, Washington, DC
February 10, 2000 - Policy Council, Washington, DC
March 16-17, 2000 - International Trade Advisory Council, Washington, DC
March 21, 2000 - Credit Management Advisory Council, Washington, DC
March 22-23, 2000 - Taxation Committee, Washington, DC

% of households owning a PC 53%
% of households connected to the Internet 34%
% of households buying items on-line 17%
% of on-line shoppers that bought from an auction site 51%

Washington Retail Insight is published by the National Retail Federation, 325 7th Street, NW, Suite 1000, Washington, DC 20004. Please contact Mike Epstein at (202) 783-7971 or e-mail with comments, suggestions, or for subscription information.