With privacy issues taking center stage at both the federal and state levels, NRF is undertaking a new privacy project designed to help state retail associations defend against restrictive privacy bills in state legislatures.

Building on a project initiated by two NRF member companies, NRF's Policy Council agreed to engage the services of two respected academics to review privacy practices and current data in order to assist retailers and state retail association executives with their presentations.

The flood of privacy legislation-more than half the states with legislatures in session have measures pending-comes in the wake of the financial modernization bill passed by Congress last year, which contained a provision allowing the states to impose even stricter privacy laws. Some state attorneys general have construed that provision as a mandate to restrict information sharing not only by financial institutions such as banks, but by retailers as well.

Among the issues NRF will cover are such topics as opt-in/opt-out provisions, affiliate vs. non-affiliate data sharing, and identity theft.

NRF has created a new task force to oversee the privacy project. If your company is interested in participating, or you have any additional questions, please contact Sarah Whitaker or Mallory Duncan at (202) 783-7971.

NRF DEVELOPS INTERNET TAX STRATEGY

On January 18, 2000, the National Retail Federation (NRF) Board of Directors adopted a policy statement calling for equitable collection of state sales and use taxes across all distribution channels. Following that directive, NRF has developed a comprehensive four-part strategy that includes separate yet distinct campaigns operating simultaneously, including:

1) a campaign to influence the Advisory Commission on Electronic Commerce;

2) a legislative campaign designed to influence Congress and the Administration;

3) a Public Relations/Consumer Education campaign to educate consumers and counter misinformation; and

4) a State and Local campaign to simplify state sales and use tax systems and compel States to educate taxpayers about existing use tax obligations.

These campaigns will utilize NRF Board officers, member companies, trade associations under the NRF umbrella, state retail associations, State and local associations, other coalitions supporting tax equity for all retailers and consumers, and outside consulting firms. To coordinate activities, NRF will create a Remote Commerce Tax Working Group, modeled after NRF’s Bankruptcy Working Group, to develop and implement the multiyear lobbying strategy. The working group may include company representatives from NRF’s Policy Council and Taxation Committee.

If you have any questions, please contact Scott Cahill at (202) 626-8168. 

MANAGED HEALTH CARE CONFERENCE DELAYED DUE TO ILLNESS

The scheduled House-Senate conference on managed care reform legislation that was scheduled to begin yesterday has been postponed due to Senator Edward Kennedy's stay in the hospital. His sickness, combined with the upcoming Congressional recess, has pushed the start of the Conference to February 28. Work is expected to continue during the recess, as both Kennedy and Senator Don Nickles (R-OK) have directed their staffs to work on the issue during the break. Both sides have expressed hope that they can complete the Conference before Easter recess, although the delayed start puts that target date in doubt.

If you have any questions, please contact Katherine Graham at (202) 626-8195. 

DOL CALLS FOR OVERTIME RECALCULATION

In a recent guidance letter, the Department of Labor (DOL) directed companies that offer hourly employees stock options to recalculate overtime payments to these employees when the option is exercised, arguing that stock options are a form of compensation.

This is the second time in recent weeks that the DOL has come under fire for issuing controversial guidance letters, which are routinely released publicly and consulted by other companies. The stock option guidance came in response to an unidentified corporate attorney's questions about a hypothetical stock option plan. DOL officials said that under that scenario, the company should treat the stock options as part of the worker's normal compensation - not a special bonus or profit-sharing plan. That would mean a higher base pay for the worker and therefore a higher overtime rate.

Because a number of retailers provide stock options to their hourly employees, NRF has been working closely with Members of the House and Senate to draft legislation clarifying that stock options should not be calculated in the regular rate of pay. A bill is expected to be introduced by the end of February, and should move quickly through Congress.

If you have any questions, please contact Katherine Graham at (202) 626-8195. 

HOUSE APPROVES MARRIAGE PENALTY BILL RELIEF

The House of Representatives voted 268 to 158 to approve a bill (H.R. 6) that would provide tax relief for 25 million married couples by increasing the standard deduction and widening the 15 percent income tax bracket for those who file joint returns.

Despite strong partisan differences over the best approach for providing such relief, 48 Democrats voted for the GOP-backed bill. The legislation, estimated to cost $182 billion over 10 years, would increase the standard deduction for married couples to an amount equal to twice the standard deduction provided for single filers, broaden the 15 percent income tax bracket for married couples filing joint returns to twice the income level allowed for single filers in the same bracket, and raise the income phase-out limit for the earned income tax credit by $2,000, so that low-income couples who get married would not see a reduction in their benefits. A less comprehensive Democratic alternative that would have targeted tax relief to low- and middle-income couples failed by a 192 to 233 vote.

If you have any questions, please contact Scott Cahill at (202) 626-8168. 

UPCOMING NRF MEETINGS

 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

RETAIL FACTOID 

According to an Ernst & Young study, the most important factors in Internet purchasing on a scale of 1 to 5 are: 

Security of credit card information 4.65
Ease of maneuvering the site 4.20
Ability to comparison shop 4.02
How well products are described 3.98
How well products are pictured 3.85

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.