Legislative Newsletter -June 2015 Issue
June 2015
Iowa Governor Signs Historic Bill
Iowa Gov. Terry Branstad has signed a bill – sponsored by the Iowa Self-Service Laundry Association – which repeals the sales tax on self-service laundries in that state.
Before the passage of this bill, Iowa laundry owners had been paying nearly 9 percent of their gross sales each year to satisfy this tax. The governor’s signature caps off one of the largest legislative wins for the self-service laundry industry in years.
The tax bill passed in the Iowa Senate 50-0, after sailing through the House of Representative by a wide 76-14 margin.
“The whole process was a bit of a blur, and it took a ton of work from many more than just me,” noted ISSLA President Daryl Johnson. “We had some amazing owners spending a ton of time at the Capitol and digging deep to fund the fight.”
“I couldn’t be happier – or prouder – of our members in Iowa who have had the incredible will and tenacity to see this through,” said Coin Laundry Association President and CEO Brian Wallace. “It’s amazing what a group of like-minded business owners can accomplish. It’s just a monumental legislative victory.”
The ISSLA spent approximately $35,000 during its five-year battle to repeal the tax.
However, similar battles to keep self-service laundries exempt from sales tax are occurring more frequently each year. Essentially, due to the nature of the coin laundry business, these taxes become a direct income tax on laundry owners’ gross sales.
For more information on how you can make a difference in this fight, visit: https://coinlaundry.org/advocacy/stop-laundry-tax.
Sales Tax Threat in Pennsylvania
The ongoing budget battle in the state of Pennsylvania includes a proposal to expand sales tax to previously exempted services, including self-service laundry. This broadening of the sales tax base, proposed by Gov. Tom Wolf, is designed to provide $3.8 billion in property tax relief.
The budget standoff continues between Gov. Wolf and the state’s legislature. Most believe this plan will not pass in its current form; however, sales tax expansion no doubt will continue to be part of conversation in this state going forward.
Currently, only three states assess sales tax on self-service laundry – Hawaii, West Virginia and New Mexico. Repealing the exemption in Pennsylvania would place this state among the extreme minority of states taxing this crucial service.
Illinois Eying Laundry Owners to Help Shore Up Dismal Budget
Due to the extremely poor financial condition of the state of Illinois, the state legislature is exploring various ways to increase revenues. And one of the ways that continually comes up in such conversations is the expansion of the sales tax to services, including self-service laundry.
In fact, Illinois Sen. Michael Noland has sponsored a bill (SB 1260), which specifically places a tax on laundry and drycleaning services. This bill has been co-signed by Illinois Senate President John Cullerton and Senate Majority Caucus Whip Mattie Hunter.
Such a tax would result in what is essentially a gross receipts tax that, depending on where a store is located, will represent from 6 percent to 9.75 percent of that business’ gross receipts.
Five years ago, a similar bill came before the state legislature, and the Illinois Coin Laundry Association was able to mount an effective legislative education and lobbying campaign effort to defeat it. Of course, this victory came at a price, to which many laundry owners contributed.
This time, the ILCLA has hired the firm of Nicoly and Dart, LLC to lobby the state legislature on the industry’s behalf. Again, funds are critical to finance this effort. What’s more, the CLA is asking laundry owners to contact their local state senators and representatives to voice their concern over this topic, as well as to explain the devastating impact a sales tax would have on their small businesses and the communities they serve.
The CLA has developed a concise set of talking points to which laundry owners can refer during such discussions: https://coinlaundry.org/advocacy/stop-laundry-tax.
For more information about the tax threat in Illinois and how you can help, please visit:https://coinlaundry.org/ilcla/laundry-tax.
U.S. Mint: The Latest on the Alternative Metals Study
On December 12, 2014, the U.S. Mint submitted its biennial report to Congress, providing its progress and recommendations related to the Mint’s Alternative Metals Study.
“We’re pleased to report that the U.S. Mint cited that stakeholders – including the Coin Laundry Association and its members – overwhelmingly recommend no changes to the quarter,” said CLA President and CEO Brian Wallace. “In fact, the CLA’s testimony and public comments from CLA members were included in the final report to Congress.”
Based on the submitted testimony, changing the composition of coinage could cost the industry from $2.4 billion to $6 billion, against an annual savings to the government of just $46 million to $57 million.
Wallace and CLA Board member Michael Finkelstein attended this year’s Coin Industry Stakeholders’ Meeting at the U.S. Mint on March 18.
“This continued engagement is very beneficial to promoting the interests of the self-service laundry industry and continuing dialogue with Treasury and Mint officials,” Wallace added.
During that March meeting, after an update on the 2014 report to Congress, the Mint shared its plans for the next two years. In the next phase of the project, the Mint plans the following:
- Continue seamless 80/20 alloy testing and evaluation. This slightly different alloy of 80 percent copper and 20 percent nickel for the nickel, dime and quarter may prove to be seamless, which means there would be no change in weight or electromagnetic signature.
- Pursue development of other seamless alloys.
- Continue research and development into stainless steel.
- Explore further production improvements. (The Mint reported that, since 2010, production costs for the penny, the nickel, the dime and the quarter have been reduced by 30 percent.)
- Continue coin industry stakeholder outreach. (The CLA plans to continue an active engagement in this process, including attendance at all future meetings.)
- Initiate studies to understand consumer behavior regarding the use of coins for commerce.
U.S. Mint officials also briefed the CLA on legislative developments, which include at least two bills introduced in January 2015 in the U.S. House of Representatives – one would mandate that all coinage be minted with U.S. steel, and the other would prohibit the manufacture of any coin with a production cost exceeding its face value. The Mint reinforced that Congress has the responsibility of setting law on these issues.
NYC Proposes New Regulations on Commercial Laundries
A bill in the New York City Council that would tighten regulations on large-scale, commercial laundry facilities is gathering steam. Thirty members – a majority of the council – have signed on as co-sponsors, and the New York City Labor Council, an umbrella group for 300 local unions, has endorsed the measure.
The legislation, called the Clean Act, would set standards to limit workers’ exposure to harmful substances and forbid what council members believe are currently “sweatshop-like conditions,” according to a report in Crain’s New York Business. It would require laundries – which are used by hundreds of hotels, hospitals and restaurants – to be licensed and regulated by the city’s Department of Consumer Affairs.
Self-service laundries and drycleaners are already overseen by that agency.
David Potack, president of Unitex Textile Rental Services, based in Mount Vernon, N.Y., and vice chairman of the Textile Rental Services Association, recently testified before the council against the bill. He argued that, while he believes the council and advocates are well-intentioned, the laundry industry as a whole is already subject to numerous layers of city, state and federal regulation. Businesses that abuse or overburden their workers are already in violation of those rules and will likely find a way to skirt new ones as well, Potack explained.
“As a business operator, it can get confusing,” he noted. “But no one is asking for a free pass or to bend the rules.”