Retailers catch a break in June Sales, rebate checks and weather help, but economic worries linger in picture By Andria Cheng, MarketWatch Last update: 12:47 p.m. EDT July 10, 2008 NEW YORK (MarketWatch) -- U.S. retailers sales received a lift in June from promotions, warmer weather and stimulus checks from the government, helping Wal-Mart Stores Inc. to lift earnings forecasts, against a background of economic worries that's battered consumer spending.
About two-thirds of the retailers, led by Wal-Mart exceeded estimates, according to research firm Retail Metrics. That contributed to the sector's best monthly performance since March 2007 with a 4% gain, almost doubling analysts' 2.4% estimate, the firm said. Wholesale clubs and discounters that sell food and other necessities again outperformed apparel retailers and department stores peddling more discretionary merchandise.
The $100 billion-plus in tax-rebate checks, the majority of which have been mailed, have helped boost retailers' June sales after helping May sales at retailers such as Wal-Mart, according to analysts. Warmer weather also provided shoppers a reason to buy shorts, air conditioners and other summer merchandise, while aggressive semiannual sales and promotions tied to Independence Day and Father's Day further fueled otherwise lackluster demand, they said.
"The rest of the year is still going to be very challenging," said analyst Sarah Henry of MFC Global Investment Management, whose $240 billion in assets include Wal-Mart shares. "Sales are still being driven by consumables and nondiscretionary items plus price over more cyclical and discretionary items. I don't think there's too much fuel between now and the rest of the year."
The unemployment rate at a four-year high of 5.5% and record-high oil prices, coupled with other economic pressures have eaten into shoppers' budgets and hurt their confidence and spending. Outlook for the remainder of the year amid a rise in oil prices sent the S&P Retail Index 2% lower in late-morning trading despite the better than expected June sales.
"With the rebate checks, we've seen a turn in June," said Jharonne Martis, an analyst of Thomson Reuters. "We'll also see a spike in July and August with the back-to-school season, but after that, it's going to take more than rebate checks and back-to-school to fix the economy."
In addition to Wal-Mart, off-price retailers TJX Cos. as well as value-oriented teen retailer Aeropostale Inc. raised forecasts while upscale department stores Nordstrom Inc. and Saks Inc. cut theirs. Wal-Mart, the largest U.S. clothing chain, and several others in the apparel sector have continued to report declining sales, promotions and warmer weather also helped them to report better than expected results, analysts commented.
ALL BUSINESS IS LOCAL By Erin McCallum Legendary Speaker of the House Thomas "Tip" O'Neill once declared, "All politics is local." He meant that people in towns and cities throughout the country had a powerful influence on politicians, legislation and policies at every level-from Main Street to Pennsylvania Avenue.
Increasingly, all business is "local," too. As an employee or owner of a small business, you can have a powerful influence on politicians, legislation and policies that impact the company you work for. What happens at the legislative level in Olympia impacts our daily lives in many ways. It can also affect our co-workers, friends, families, and the economic health of our communities and state for generations.
Indeed, your ability to influence critical decisions about business has never been stronger. Technology-particularly the internet's unique ability to present information clearly and rapidly, and to deliver individuals' opinions directly to corporate and political leaders-has fundamentally changed our relationship to both business and government.
Not so long ago, employers had no easy way to tell their workforce about certain bills or proposed policy changes that could dramatically impact their company or its industry. Nor were employees much interested in hearing such messages. Times have changed. Today, some of Washington's largest corporations and smallest businesses are opening lines of communication, offering nonpartisan views on political issues that affect their employees and business in general. And more often, employees are listening.
Why? For one thing, companies aren't telling employees how to vote. They're filling an "information gap" carved out by today's headlines: scandal, personality and fundraising. It used to be difficult for citizens to find factual, un-biased information about the issues and policies that impact their companies. Now, it's just a few "clicks" away. The organization I lead, for example, has created a website to help Washington businesses and employees better understand and participate in the political process. If that sounds a little dry, perhaps the issues may whet your appetite.
Education For Washington State employers, regardless of industry, education is the top priority. To remain competitive in today's global economy, we'll need kids who are strong in reading, writing, math, science and technology. This year, our state legislature is debating the standards to which our students are to be held accountable. Washington's business community wants to keep the standards high, and opposes efforts to lower them.
What's your view?
Your choice for President in November will certainly be important, but your opinions and how you vote at the local and state legislative level may be even more crucial to you, your family, and the company you work for. Health Care
As the cost of health care and coverage continues to outstrip inflation, many employers have been forced to reduce benefits, limit or even drop coverage. This affects the number of uninsured in the state, making Washington less attractive to new and existing businesses that want to provide good benefits to attract the best employees. What's your view? Your choice in the national Congressional races will be important, but perhaps no more important to you and your family than your participation at the local and state legislative level.
Tax Reform Property taxes have skyrocketed in recent years. You may be among the many citizens and companies that now pay twice the tax you paid just a few years ago. Although Washington's property tax system is one of the best in the country, there's still room for improvement if we want to continue to attract the best jobs to our state.
What's your view?
While letters and contributions to your favorite national candidates will play a role in what happens, your opinions and dollars may have even greater impact closer to home.
State Budget and Spending Washington's private sector believes that fiscal restraint is good business for everyone: that government should limit spending to what it can take in, rather than continue to increase revenues to meet ever-increasing spending demands. It's also important to make the state budget more transparent, so taxpayers can track the effectiveness of their investments.
What's your view?
These are but a few of the crucial issues currently facing Washington business and our elected officials. Transportation, paid family leave, land use and regulatory reform and workers' compensation are all "on the table." Now's not the time to become cynical. In less time that it takes to call a radio talk show or attend a partisan rally, you can read about the key issues currently affecting companies and employees in Washington. Then, you can speak out, with real impact. You can exercise your right to vote, and vote well-informed. A new Web-based information resource makes it easy for companies both large and small, and their employees to learn about candidates, issues and policies that affect business. It's called G.R.O.W. (Growing Roots for Our Workforce) Washington. GROW also provides information on polling locations, voter registration and contact information for elected leaders, along with a way to instantly send a personal letter to a lawmaker. GROW also keeps track of each state lawmaker's voting record on business issues. As employees learn more about how issues impact their own jobs and companies, and which lawmakers are working hard to improve business in the state, their influence will increase. Nothing could be better for Washington in the long run, because all business, like all politics, is local.
Erin McCallum is president of the non-profit, non-partisan, Enterprise Washington (www.enterprisewashington.org) and its Business Institute (www.businessinstitutewa.org), which help companies and employees to better understand how elected officials establish public policy, and to become more involved in the political process.
NOTICE REGARDING $1,000 TAX CREDIT FOR SOURCING CHANGES
RULE MAKING--ADOPTION (CR-103):
WAC 458-20-27702 (Rule 27702) Taxpayer relief - Sourcing Compliance -One thousand dollar credit and certified service provider compensation for small businesses is a new rule explaining certain small business relief provided to eligible taxpayers implementing new local retail sale tax sourcing requirements under RCW 82.32.730 and RCW 82.32.490. An "eligible taxpayer" is a taxpayer that: (a) Immediately before July 1, 2008, was registered with the Department and engaged in making sales of tangible personal property that the taxpayer delivered to physical locations away from its place of business; and (b) During the calendar year 2008: (i) Has a physical presence in Washington; (ii) Has gross income of the business of less than five hundred thousand dollars; (iii) Has at least five percent of its gross income from sales subject to sales tax derived from sales of tangible personal property delivered to physical locations away from its place of business; and (iv) Has at least one percent of its gross income from sales subject to sales tax derived from deliveries of tangible personal property to destinations in local jurisdictions imposing sales tax other than the one to which the taxpayer reported the most local sales tax.
This rule explains the one thousand dollar tax credit and the subsidized certified service provider option available to eligible taxpayers who must implement destination based local sourcing under RCW 82.32.730 and RCW 82.14.490 beginning July 1, 2008. This rule also establishes the compensation rate for these certified service providers providing services to eligible taxpayers under RCW 82.32.760.
IRS Increases Mileage Rates through Dec. 31, 2008 http://www.irs.gov/newsroom/article/0,,id=184163,00.html The Internal Revenue Service has announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Rev. Proc. 2007-70. In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2008. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.
While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs. The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.
The new six-month rate for computing deductible medical or moving expenses will also increase by eight (8) cents to 27 cents a mile, up from 19 cents for the first six months of 2008. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile. The new rates are contained in Announcement 2008-63 on the optional standard mileage rates. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
Economic Stimulus Payment FAQs: Business http://www.irs.gov/newsroom/article/0,,id=182005,00.html This link has answers to some of the most commonly asked questions regarding the economic stimulus incentives for businesses. Scroll down the list for business-related questions and answers, including an example of how the increased 179 deduction, increased 50% depreciation deduction and the regular depreciation deduction could be used in conjunction with each other.
Filing Extensions Changing for Some Business Taxpayers Later this Year http://www.irs.gov/newsroom/article/0,,id=184347,00.html Internal Revenue Service officials announced a change in the extended due date on certain business returns to help individuals better meet their filing obligations. The change, which reduces the extension period from six to five months, eases the burden on taxpayers who must report information from Schedules K-1 and similar documents on their individual tax returns.
Currently, the extended due date for both businesses and individuals often falls on the same date, generally Oct. 15. This creates a burden for individual taxpayers who rely on the information from Schedule K-1 and other similar statements to prepare and file their personal tax returns in a timely manner.
This change will be effective for extension requests with respect to tax returns due on or after Jan. 1, 2009.
National Taxpayer Advocate Releases Report to Congress; Identifies Priority Challenges and Issues for Upcoming Year http://www.irs.gov/newsroom/article/0,,id=184555,00.html National Taxpayer Advocate Nina E. Olson today delivered a report to Congress that identifies the priority issues the Office of the Taxpayer Advocate will address in the coming fiscal year. Among the key areas of focus will be improving IRS procedures to protect victims of tax-related identity theft and expanding outreach and education to individuals who have lost their homes to foreclosure concerning the "cancellation of debt" tax consequences they face.
The Advocate's report, which is required by law, sets out the objectives of the Office of the Taxpayer Advocate for the upcoming fiscal year and provides substantive analysis of issues as well as statistical information.
Scammers Use e-Mail, Fax to Pose as IRS http://www.irs.gov/newsroom/article/0,,id=184628,00.html The Internal Revenue Service cautions taxpayers to be on the lookout for a new wave of scams using the IRS name in identity theft e-mails, or phishing, that have circulated during the last two months. In May and June alone, taxpayers reported almost 700 separate phishing incidents to the IRS. In 2008 so far, taxpayers have reported about 1,600 phishing incidents to the IRS.
The most common scams involve tax refunds and, this year, economic stimulus payments. Although most of these scams consist of e-mails requesting detailed personal information, the IRS generally does not send e-mails to taxpayers, does not discuss tax account matters with taxpayers in e-mails, and does not request security-related personal information, such as PIN numbers, from taxpayers.
Recent Articles from e-News for Small Businesses
SBA introduces new online courses for small business owners The Small Business Administration's Small Business Training Network has introduced two new free online finance courses to help small business owners with the basic principles of finance and borrowing:
Finance Primer: Guide to SBA's Loan Guaranty Programs
How to Prepare a Loan Package
Retirement News and Employee Plans News Read the spring issue of Retirement News for Employers and the summer edition of Employee Plans News.
New tax benefits for businesses on SBTV IRS segment on SBTV explains how small business owners can hire their teenage sons or daughters for summer work and the importance of keeping good records. Related links:
Family Help
Recordkeeping
FS-2008-21, Business Provisions of the Economic Stimulus Act of 2008
IR-2008-58, IRS to Issue Guidance on Special 50-Percent Depreciation Allowance
IR-2008-22, 2008 Economic Stimulus Act Provides Tax Benefits to Businesses
Summer Arrival Brings Fresh Washington Grown Cherries to Wal-Mart Washington State Fruit Commission, Rainier Fruit Company Celebrate locally grown produce at Wal-Mart
Lacey, WA - Fresh Washington-grown cherries took center stage June 26 as state officials and agricultural groups joined Wal-Mart in celebrating the arrival of the locally grown fruit for Washington customers at the Wal-Mart here. Lt. Governor Brad Owen; Senator Marilyn Rasmussen, WRA Board Member-Jennifer Spall, Wal-Mart, WRA President/CEO-Jan Teague, Le Dabney, Wal-Mart regional developmental manager who acted as host and emcee, B.J. Thurlby, president of the Washington State Fruit Commission, and Mark Zirkle, owner, grower and CEO of Rainier Fruit Company, were among the guests and speakers.
In addition to remarks from officials, the event included special displays of fresh cherries and information about the value and health benefits of cherries. Each year, Washington State produces roughly 60% of the U.S. crop, resulting in approximately 10 million boxes this year, Thurlby said. Each standard box weighs 20lbs. The Washington cherry industry has a value of $600 million and provides more than 40,000 jobs during the summer season.
"As a family-owned business in the Washington orchard and fruit-growing business for over 100 years, Rainier Fruit is pleased to be here to celebrate the arrival of the cherries," Rainier Fruit Company owner Mark Zirkle said. "Washington consumers have never had better access to the locally grown fruit than they have today."
Destination-Based Sales Tax Software Solutions
Vendors who offer retail solutions to destination-based sales tax sourcing:
What is changing for Washington State Retailers?
Prior to July 1, 2008, retail sales tax is collected based on the location FROM which merchandise is shipped or delivered. Substitute Senate Bill 5089 changes that.
On July 1, 2008, Washington retailers delivering goods to customers in Washington must start collecting sales tax based on where the customer receives the merchandise - the "destination" of the sale.
Edge Technologies is a Washington State Point Of Sale Software Developer offering solutions for calculating and reporting these sales taxes
Three programs have been developed to provide solutions for calculating and reporting these different tax areas. Both have the ability to update the address database on a periodic basis
Stand Alone
This program will allow you determine the tax area and calculate the tax rate based upon the destination address. It is self contained and requires no internet access or other program to operate and will run over a network. Your end of month report will allow you to quickly and easily report your taxes collected. Take a few minutes and download the test version or view our tutorials at www.profit-plus.com.
Edge Technologies, Inc. is pleased to announce a Web Services version of its Tax Link destination sales tax product.Now your shopping cart and other web applications can benefit from our service supporting the Washington State Destination Sales Tax.If you are a retailer with a shopping cart, here is your answer.
How It Works
Your web application sends us the address information via a secure URL (HTTPS), using an HTTP POST transaction.Our server returns the tax area, tax rate, and normalized address of any matching addresses.If there is only a single match; your web application can simply use it; otherwise it can construct an HTML SELECT with the matching addresses so the user can select the proper one.It will most likely be necessary to contact your IT person or your Shopping Cart provider to make these changes for you.
Premier
This program is integrated with the Profit Premier Point of Sale system and works in conjunction with the Ship/Deliver function and existing sales tax reporting within the Profit Premier System.
Merchants Consulting is your source for Streamlined Sales Tax automation. Our SST Module is for retailers to capture destination sales tax up front, and report properly at the end. Our software enables retailers to collect, report, and track sales tax by shipping destination within Washington State.
Features:
Setup and use easily.
Automates the loading of the streamlined sales tax chart into RMS tax tables.
Operates within the RMS point of sale screens.
Streamlined Sales Tax reporting.
How It Works:
During an RMS sales transaction, when entering shipping information, the cashier enters the zip code plus four or the ship to address plus zip of the destination. The destination tax code will show for the cashier to enter into a pop up box. The cashier enters the tax code and the sales tax will be adjusted to charge the rate of the shipping destination.
Need Help?
Merchants Consulting support personnel are available for telephone and remote support to help you install the SST module for a one time $40 support fee. (Merchants Managed Services Agreement customers are no charge). email for appointment (request your preferred date and time for us to contact you to perform the installation)
For more information please contact Merchants Consulting LLC at 253-509-2110
Registration is now open for the Governor's Safety and Health Conference.
Thousands of workers are injured, and sadly, more than 100 Washington workers die from job-related injuries each year. Many of these injuries and losses are preventable. The conference provides resources to assist in design and maintenance of a sound safety and healthy culture at your workplace. The benefits include; reduced injuries, less time lost from work, money saved on industrial insurance premiums and an increase in profits. The comprehensive safety skills gained will benefit you far beyond the workplace.
There are two great pre-conference sessions, one dealing with wellness for commercial drivers that is a MUST SEE for any type of driver working out of their vehicle. This will take place Tuesday, September 23, 8:30am - 4:30pm at the DoubleTree Hotel, Spokane Falls Ballroom. For more information, please contact Sharon Drozdowsky at (360) 902-4622 or dros235@LNI.wa.gov . This is valuable for delivery drivers too!
The second session deals with Solutions for an Aging Workforce. Many workplaces are confronted by the demographic reality of an aging workforce. While older workers do have particular needs, solutions must take into account the needs of workers at all stages of their careers and lives. The course will examine specific issues, including workplace design for safety and health; work/life balance; maintaining health as we age; the roles of employers, employees, the larger community, and public policy in addressing this demographic change. For more information, visit http://nwcenter.washington.edu or contact Maribeth Moore, Northwest Center for Occupational Health and Safety, 206-543-1069 or moomoore@u.washington.edu.
Registration is now open for the Governor's 2008 Economic and Workforce Development Conference, Sept. 3-4, in Lynnwood.
Learn new strategies, applaud best practices and make important connections that will help move your workforce development organization forward.
The conference features:
·An update from Gov. Chris Gregoire on The Next Washington.
·Recognition of 2008 Economic and Workforce Development Award winners.
·Cutting-edge workshops on industry clusters, Innovation Partnership Zones and the green economy.
·Compelling breakout sessions to help your organization thrive in a global marketplace.
Register now and qualify for the early-bird registration fee of $150. After Aug. 8, it's $200. Tickets to this two-day event include continental breakfast, lunch and an evening reception.
Join us and learn new ways to keep Washington's economy and workforce moving ahead!
Washington Workforce Development News: Keep posted with the latest workforce development news in Washington state. Reply to this message if you would like to receive our brief weekly e-mail news.
The Washington Attorney General (AG) announced these upcoming free community shred events and free identity theft prevention forums providing opportunities to shred important personally identifiable documents. Bring your documents to be shredded!
Below is a list of upcoming events. You can find more information and additional shredding sites online at www.atg.wa.gov/shredathon.aspx.
OLYMPIA: Saturday, July 26, 2008, 10 a.m. - 2 p.m. WSECU, 400 East Union St. Olympia. Shredding provided by Shred-It.
MOSES LAKE: Thursday, August 14, 2008, 11 a.m. - 2 p.m. Location TBA. Guard It! identity theft forum with Attorney General Rob McKenna: Noon to 1:30 pm.Shredding donated by United Data Security.
CENTRALIA: Wednesday, September 3, 2008, 11:30 a.m. - 2 p.m. Location TBA. Guard It! identity theft forum with Attorney General Rob McKenna: Noon to 1:30 pm.Shredding donated by LeMay
GOLDENDALE: Tentatively planned for Wednesday, September 10, 2008. Location TBA. In conjunction with Guard It! identity theft forum with Attorney General Rob McKenna.
TACOMA: Ongoing, Monday-Saturday, 8 a.m.-4 p.m. Tacoma Recycling Co., Inc., 2318 South Tacoma Way Offers free document destruction for private individuals who bring in less than 10 pounds of material during regular business hours. Consumers may witness their papers being destroyed. Businesses will be charged for this service. Info: (253) 474-9559
Washington Retail Association | 618 Quince St SE, STE A | PO Box 2227 | Olympia | WA | 98501
The Washington Retail Association, WRA, is a 501 C 6 trade association formed to advocate for Washington State’s retailers at the local, state and national level. Since 1987, the WRA has protected Washington's retailers from unreasonable taxes, fees, regulations and legislation. The efforts of the WRA benefit all Washington state retailers and help fuel statewide economic growth.
