The Mheda Journal

Today (April 15) has historically been tax day (although this year’s filing deadline has been extended to the 18^th), so it seems somewhat fitting that the federal government yesterday approved a law that will have an impact on the taxes for many small businesses.

President Barack Obama signed into law a bill that repeals a requirement in last year’s health care overhaul for business owners to file a 1099 Form with the Internal Revenue Service for all purchases of more than $600 a year. According to a Reuters article, “The tax reporting provision was meant to improve tax compliance and help pay for the healthcare law, but small firms and the self-employed complained it would bury them in paperwork.” So this would be good news for businesses of all sizes, small businesses in particular.

News of the repeal spread like wildfire on Twitter, and I was able to read several articles about the topic within a few minutes of the bill’s passage. Pretty amazing how far technology is come in the last few years. (And for the record, most if not all of the sentiments expressed by my Twitter followers found the repeal to be good news.) When awash in such rapid information, it’s sometimes hard to sift through to find the important, impactful details. Here’s one that I thought did a good job of breaking it down pretty simply.

So score one for the taxpayers. Hopefully, many of the MHEDA distributors who cited this and other government regulations as potential hindrances this year in our Industry Forecast can breathe a little easier. After all, it looks like things are looking up if the First Quarter is any indication.

Have a good weekend, everyone!

I was going through some built-up e-mail today when I came across my New York Times e-newsletter from Friday. Nevermind that I’m likely going to have to pay for it if I want to continue to receive it each day, this one contained an interesting editorial. Since the Supreme Court ruled in 1992 that retailers could be required to collect sales tax only in states where they had some physical presence, many businesses, particularly online retailers like Amazon.com, have not charged sales tax to consumers. Not only does this lower out-of-pocket cost for customers, it also keeps the states and municipalities in which it does business from collecting tax revenue. The point of the article is that in times when many states are in fiscal disarray, this rule makes no sense.

I tend to agree with that, but that’s not the issue I want to focus on. What got me thinking was that this rule, which I was unaware of, seems to put small businesses at a clear disadvantage. Most small businesses, including most MHEDA members, don’t have a physical presence in more than one state. That means that they are required to charge sales tax in their state, which online competitors based somewhere else wouldn’t have to do. Even if the small business in question transacted the sale over a website or e-store, it still would have a harder time competing with an out-of-state online competitor on price  because of its physical location tax requirement.

In this day and age when businesses are doing more search engine optimization to get their websites and businesses noticed outside their traditional geographic footprint, this is an issue that is often being overlooked. The Times article in question mentions several lawsuits in play regarding this rule. Several states have passed laws requiring sales tax be collected, so this situation will certainly come to a head soon. What do you think? Is this an issue that should be talked about more often? What does it mean for distributors going forward?

I was reading an article today about what I thought was going to be an topic not related to my blog at all. It was all about legal risks of new technology. One particular section of the article, though, grabbed my attention. When I sat back to think about it for a minute, I realized it was something that may have implications for MHEDA members and business owners of all kinds.

The section of the article that got me interested says, “Courts have regularly held employers liable for their employees’ inappropriate use of employer-provided mobile devices. For example, in Ellender v. Neff Rental, Inc., an employer was held vicariously liable for the negligence of an employee who caused an accident in his personal vehicle while conducting business on his employer-provided cell phone. Therefore, associations should establish written policies that work to monitor and deter inappropriate use of association-related devices both in and outside of the office.”

While this article was specific to associations, the general principle is applicable to employers in general, including businesses. Over the last several years, it has become more and more common for businesses to provide smartphones and mobile devices to employees. But what’s less clear is what the employers tell the employees about their use. Is there a defined policy at your company about using cell phones? If so, does it include specific information about when it’s OK to use them? Much has been made in recent months about the dangers of phoning and texting while driving, but that is really only a small piece of a more general usage policy. If an employee takes a business call at home on an employer’s phone after hours, is that considered work? If an employee makes a personal call at home on an employer’s phone, is that allowed? It really opens some interesting legal loopholes if you sit and think about it.

Has your company addressed these issues? If so, how? What advice would you have for others? I’d love to get a discussion started about these issues. Leave a comment to let me know what you think!

Hopefully it’s not too late to address this topic, since the elections were two weeks ago at this point, but here in Central New York, they’re still counting votes to determine the winner of a closely contested Congressional vote. So let’s say it still counts.

The results of the election were not necessarily surprising, as Republicans darn near swept into the House of Representatives. We posted an article about how the new Congress may impact legislation concerning the material handling industry on The MHEDA Journal website earlier this week. While it’s hard to know for sure what will happen, it is interesting to consider what will become of proposed cap-and-trade legislation, carbon emissions rules and expiring tax cuts.

I posed the question to several MHEDA members on LinkedIn, and got a few interesting replies. I urge you to log in to MHEDA’s LinkedIn Group and give it a read or even post a reply. How will the election results impact your business?  One of the most interesting replies came from David Griffith, president/CEO of Modern Group (Bristol, PA). He said, in part, “It is not a ‘Red’ issue or a ‘Blue’ issue; it is a leadership issue. Leadership needs to stand down from the next election and govern this country so that we create jobs, fuel growth and balance our books.” In this time of partisanship when seemingly everyone jumps to defend one extreme or the other, that is a bit of a refreshing perspective. With the state of politics, I’m not sure it’s a possibility, but I’m willing to be proven wrong.

What do you think? How will the changing of the guard in Congress play a role in your company’s success in 2011? What can material handling distributors do to make a difference in Washington?

The Small Business Jobs Act was signed into law on Monday, September 27, by Barack Obama. The new legislation could have an impact on many MHEDA members, seeing as how a high percentage of association members qualify as small businesses. One main feature of the Act is $30 billion in lending plus tax breaks for small businesses, but as one of my colleagues stated, “it is called the Jobs Act, not the Loan Act.” So what impact will it have?

The target is to create 500,000 new jobs, which it hopes to achieve through greater access to credit for small businesses, tax cut incentives for hiring and write-offs for purchasing equipment.

Now, I’m in favor of most any rule that benefits America’s small business. It’s too early to tell if this one will, in fact, benefit small business…and the Act has plenty of critics. For instance, Jade West, a lobbyist for the National Association of Wholesale-Distributors (NAW), of which MHEDA is a part, is quoted by the Associated Press as saying, “Business doesn’t need credit. Business needs customers. If they don’t have a customer base because demand is down, they’re not going to borrow because there is nothing for them to borrow for.”

Proponents, on the other hand, say things similar to what Representative Kathy Dahlkemper (D-PA) said in the same article. “More capital for business means they can expand and create new jobs. Helping businesses grow is essential to our economic recovery and getting people back to work.”

Obviously, only time will tell which side prevails. But I’m not a business owner, so I’d like to know what MHEDA members think. Will the Small Business Jobs Act work?

Accountability is one of my favorite traits. There’s not much I respect more than someone who makes a mistake and says, “Whoops, I messed that up. Sorry. I will do my best to make sure that doesn’t happen again.” When you think about it, that’s all you can ask. If what’s done is done, a little “I’m sorry” goes a long way. Of course, part of accountability is also following through on making sure that it doesn’t happen again.

In one of the most bizarre, most talked-about moments in recent baseball history, Detroit Tigers pitcher Armando Galarraga was deprived of a perfect game on June 2 when first-base umpire Jim Joyce incorrectly ruled that a Cleveland Indians batter beat out an infield hit when, in fact, he should have been called out. (For those among you who aren’t baseball fans, a perfect game means that nobody on the opposing team reaches base. No hits, no walks, no errors, no hit batsmen. 27 batters go up, 27 make outs. It’s one of the rarest feats in the game.) Galarraga eventually retired the next batter to complete the shutout and earn a victory, but was denied only the 21st perfect game in major league history and a chance at so-called immortality by a call that replays confirmed was blatantly incorrect.

After the game, Joyce owned up to his mistake, admitting that he blew the call and apologizing personally to Galarraga. I give him credit for doing so, for holding himself to a standard of accountability, and most of America has been willing to do so as well.

How does all this relate to business, you ask? Well, accountability goes a long way in business too. Just look at BP and the current situation in the Gulf. While their CEO and PR team are busy downplaying the amount of oil spilling into the gulf (only 1,000 barrels of oil daily? Really, BP?), denying their level of blame for the initial explosion, and pointing fingers for reasons why each attempt to close the pipe is failing, the public trust in anything that happens from here forward is plummeting along with BP’s stock price. Some level of public discontent was inevitable given the severity of the situation, but BP could have mitigated the outcry somewhat by some old-fashioned honesty and accountability.

We made it a company exercise a few months back to read “Journey to the Emerald City,” a book  by Roger Connors and Tom Smith about how to create a culture of accountability in your business. It’s a good, quick read and it provides a good framework for setting goals and holding people accountable. I recommend it.

Just one more comment: The oil spill tragedy also is a reminder of the importance of having a business disaster plan in place. Be ready for the contingencies!

Thanks for reading and have a good weekend!

In the February 15 issue of The MHEDA Connection, MHEDA’s e-newsletter, we posted a story called “China Decries Dumping Duties.” It was an update on the ongoing battle between U.S.-based wire decking manufacturers AWP Industries, ITC Manufacturing, J&L Wire Cloth, Nashville Wire Products and Wireway/Husky Corp. and the Chinese government regarding the cost of imported wire mesh decking.

In response, Steve Johnson, vice president of sales at Nashville Wire Products, and a member of MHEDA’s Manufacturers Board of Advisors, sent us the following letter from the counsel for the U.S. Wire Decking Coalition

Please direct any responses or comments to Steve at sjohnson@nashvillewire.com.

“Recently, the Chinese government expressed objection to the U.S. imposition of antidumping and countervailing duties of imports of a variety of downstream steel products, including imports of wire decking. The Chinese Government asserts that these measures are straining its economic relationship with the United States.

“What the Chinese Government neglects to mention is that the actions by the wire decking manufacturers in filing trade cases, and the imposition of duties by the U.S. government, are fully consistent with the international trade agreements China and the United States signed. The international agreements expressly permit the imposition of these duties when unfairly traded imports injure U.S. manufacturers. In response to petitions filed by domestic wire decking manufacturers, the U.S. government preliminary found that wire decking is being dumped, or sold at less than its fair value, in the U.S. market by huge margins ranging from 43 to 289 percent. The U.S. government also found that the Chinese government is providing  illegal subsidies to Chinese wire decking producers. Final decisions in these case are due in May.

“Similarly, in a preliminary decision, the U.S. International Trade Commission concluded that these unfair trade practices are injuring domestic wire decking manufacturers. The Commission found that the unfair imports from China significantly undercut U.S. prices and caused the domestic industry to suffer declines in production, shipments, employment and profits. In an already difficult year due to the nationwide recession, the increasing volumes of low-priced imports from China have decimated U.S. wire decking manufacturing operations and cost many workers their jobs.

“Moreover, the Chinese Government fails to mention the widespread practice by many Chinese industries of illegally circumventing the trade orders. Chinese exporters advertise to U.S. customers their willingness to transship merchandise or mislabel the country of origin of the product to evade the duties lawfully imposed.

“So, while China may ‘decry’ these duties, it cannot argue that the imposition of the duties is unwarranted or unlawful. In fact, the duties imposed are not punitive at all, but are merely intended to offset the amount of the unfair trading practices and to level the playing field for U.S. manufacturers. Enforcement of U.S. trade laws to protect domestic manufacturers and their employees from unfair trading practices is expressly recognized as lawful internationally and should not strain relations between countries. The Chinese government should be concerned with living up to its own trade obligations by ceasing illegal subsidies and cracking down on scofflaws who seek to circumvent U.S. trade orders.”

–  Kathleen W. Cannon, Kelley, Drye & Warren

Pretty heady stuff. You can leave a comment here or send it directly to Steve at sjohnson@nashvillewire.com.

Today marks the one-year anniversary of the passage of the American Reinvestment & Recovery Act (ARRA), commonly known as the Stimulus bill. Remember that?

One year later, has it stimulated anything? I’ve read many articles over the past 12 months about “shovel-ready” projects and highways and bridges and other infrastructure projects resulting from federal stimulus money. Did any of that bleed over to the material handling industry?

What has been the result of the federal stimulus for all of you out there? Particularly small businesses, how did the stimulus impact you?

So I’m little late getting to this, since the press release is dated January 12, but I still wanted to talk about this topic because I know MHEDA members find it increasingly important.

The state of California has approved the nation’s first mandatory statewide green building standards code, according to an article on logistics.about.com. Effective January 1, 2011, the code, known as CALGreen, requires all new buildings in the state to be more energy efficient and environmentally responsible, including mandates that every new building reduce water consumption by at least 20%. Other requirements say that 50% of construction waste be diverted from landfills and installation materials must emit “low amounts” of indoor pollutants. “The California Air Resources Board (CARB) estimates that the mandatory requirements will reduce greenhouse gas emissions by the equivalent of 3 million metric tons of carbon dioxide in 2020.”

As material handling distributors seek to do more and more for their customers, I know that many MHEDA members have pointed out building codes as one of the things they need to be constantly aware of. These regulations are constantly changing and can vary drastically from municipality to municipality. With California adopting this measure, other states can be sure to follow.

Read more about this new regulation here at http://logistics.about.com/b/2010/02/03/new-green-california-building-code.htm.

On November 21, the employment-related portion of the Genetic Information Nondiscrimination Act will go into effect for businesses. (The healthcare-related part went into effect in May). GINA is intended to protect Americans against discrimination based on their genetic information when it comes to health insurance and employment. The act requires covered entities to obtain and post notices informing covered individuals of their rights under the law.

What does that mean? Good question. According to genome.gov:

GINA, together with already existing nondiscrimination provisions of the Health Insurance Portability and Accountability Act, generally prohibits health insurers or health plan administrators from requesting or requiring genetic information of an individual or the individual’s family members, or using it for decisions regarding coverage, rates, or preexisting conditions. The law also prohibits most employers from using genetic information for hiring, firing, or promotion decisions, and for any decisions regarding terms of employment.

This information is not particular to material handling, but it will affect business owners of all sizes. More information can be found at http://www.genome.gov/24519851.