Hot Off the Hill

New Federal Reserve rules provide important protections when you purchase or use gift cards.

Here are some key changes that apply to gift cards sold on or after August 22, 2010:

Covered by the new rules:

New protections:

• Limits on expiration dates. The money on your gift card will be good for at least five years from the date the card is purchased. Any money that might be added to the card at a later date must also be good for at least five years.

• Replacement cards. If your gift card has an expiration date you still may be able to use unspent money that is left on the card after the card expires. For example, the card may expire in five years but the money may not expire for seven. If your card expires and there is unspent money, you can request a replacement card at no charge. Check your card to see if expiration dates apply.

• Fees disclosed. All fees must be clearly disclosed on the gift card or its packaging.

• Limits on fees. Gift card fees typically are subtracted from the money on the card. Under the new rules, many gift card fees are limited. Generally, fees can be charged if
  • you haven't used your card for at least one year, and
  • you are only charged one fee per month.
  These restrictions apply to fees such as:
  • dormancy or inactivity fees for not using your card,
  • fees for using your card (sometimes called usage fees),
  • fees for adding money to your card, and
  • maintenance fees.

You can still be charged a fee to purchase the card and certain other fees, such as a fee to replace a lost or stolen card. Make sure you read the card disclosure carefully to know what fees your card may have.

Other prepaid cards:

These new rules apply only to gift cards, which are just one type of prepaid card. The new rules do not cover other types of prepaid cards, such as:

• Reloadable prepaid cards that are not intended for gift-giving purposes. For example, a reloadable prepaid card with a MasterCard, Visa, American Express, or Discover brand logo that is intended to be used like a checking account substitute is not covered.
  
• Cards that are given as a reward or as part of a promotion. For example, a free $15 gift card given to you by a store if you purchase merchandise or services of $100 or more may have fees or an expiration date of one year rather than five years. Regardless, you must be clearly informed of any expiration dates or fees for these cards.

For more information, visit the Board of Governors of the Federal Reserve System by clicking HERE.

 

New ordinance will snub local patrons' cigarettes starting New Year's Day

Posted: August 27, 2010 - 12:18am  |  Updated: August 27, 2010 - 6:28am

A new information-reporting requirement for businesses included in the health care reform bill, but not related to health care, would force businesses to file an IRS Form1099 for all payments they make of more than $600 a year to providers of property and services. This includes corporations that provide property and services. Congress included the reporting measure in the health care bill as a revenue-raiser to offset the bill’s costs.

The bottom line is that beginning in 2012, all purchases of goods and services in aggregate of $600 or more in a year must be reported whether purchased from a corporate or non-corporate entity.  Payment with a credit or debit card will be exempted from these expanded requirements because the IRS will require reporting of those purchases by your bank and payment processor.

In practice this means restaurants will have to track their purchasing by amount, vendor and method, and then issue the appropriate reporting forms to the IRS and suppliers.  In addition, obtaining taxpayer identification numbers (TINs) is necessary before a purchase and will be an increased paperwork burden for all restaurants.  It may also require backup withholding by the payer (e.g. restaurant) when a payee’s (e.g. supplier’s) TIN is unknown or missing. 

Nearly 40 million businesses and other entities will be subject to the new, far-reaching reporting requirements. The National Taxpayer Advocate within the IRS submitted a report to Congress last week expressing concern about the "significant compliance burden" this provision could cause for businesses and others.

That’s why the National Restaurant Association is working to stop the implementation of this requirement through legislative and regulatory efforts.  We support all efforts to eliminate this expanded 1099 information reporting requirement.

Eliminating the expanded 1099 information reporting requirement has broad bipartisan support.

Sen. Mike Johanns (R-Neb.) and Rep. Dan Lungren (R-Calif.) have introduced bills undefined the Small Business Paperwork Mandate Elimination Act undefined to repeal this part of the health care bill. The National Restaurant Association has joined other business groups in supporting S. 3578 and H.R. 5141.

Another bill, H.R. 5982, the Small Business Tax Relief Act of 2010, was introduced by Rep. Scott Murphy (D-NY) however the House failed to pass the measure on July 30 due to objections to other provisions in the bill.  In a letter to Majority Leader Steny Hoyer (D-MD), Congressman Murphy recently requested that his bill be reconsidered on the floor when the House returns in September. 

The Senate also intends to consider repeal of the expanded 1099 provision when they return from August recess.  Before departing in early August, Majority Leader Reid (D-NV) made the necessary procedural motions for consideration of the issue through several amendments to the Small Business Jobs Act of 2010.  There are three amendments that are anticipated to receive consideration on September 14th:  Senator Johanns’ amendment that would repeal the expanded reporting, Senator Bill Nelson’s (D-FL) amendment and another by Senators Max Baucus (D-MT) and Mary Landrieu (D-LA) both would repeal the information reporting requirements for all businesses with less than 25 employees and would increase the threshold for reporting from $600 to $5,000.

How can you help?

Your members of Congress will be in their home districts and states until Congress goes back into session in September. This means there will likely be multiple opportunities for constituents to engage them on the issues.  We encourage you to attend town hall meetings and other events and ask your elected officials to eliminate the expanded 1099 information reporting provision when they return to Washington in September.

Here are some talking points to help you in your conversations:

•§  The expanded information reporting requirement will increase the paperwork burden for all restaurants.  Tax paperwork and compliance are already major expenses for restaurants that operate on thin profit margins, and the expanded reporting requirement only will increase those costs.

•§  A Small Business Administration study indicates that the cost of complying with the tax code for small businesses is 66 percent higher than for large businesses.  Since this reporting requirement makes almost every business-to-business transaction potentially reportable to the IRS, small businesses will be greatly impacted because the cost of complying will be significant.

•§  Seven out of ten eating-and-drinking places are single-unit operators.  These small businesses will be most impacted by the expanded information reporting requirement. 

•§  The expanded information reporting provision will have broad impact.  The National Taxpayer Advocate submitted a report to Congress recently expressing concern about the “significant compliance burden” this provision could cause for businesses and others.  The report estimates that nearly 40 million businesses and other entities will be subject to the new, far-reaching reporting requirements including: 26 million non-farm sole proprietorships, 4 million S corporations, 2 million C corporations, 3 million partnerships, 2 million farming businesses, 1 million charities and other tax-exempt organizations, and more than 100,000 government entities.

•§  Information reporting requires a payer to obtain a taxpayer identification number (TIN) from the payee before a transaction is executed; otherwise backup withholding tax may need to be applied by the payor.  This will drastically increase the paperwork burden and potential backup withholding liability on all businesses because so many more transactions will be subject to reporting.

•§  All restaurants will have to track purchases every calendar year by amount, vendor and type of transaction (credit/debit or otherwise) for the purposes of this requirement.  This will pose great difficulty for restaurants that can have many vendors over the course of a year.

•§  Although the IRS has indicated they will not require the duplicative reporting of credit and debit card purchases, this does not necessarily lessen the burden for restaurants.  The use of credit and debit cards is not free for merchants who must pay high transaction fees and make purchases by credit or debit card that much more expensive.

Contact your legislators TODAY by clicking HERE

Posted: August 13, 2010 - 3:18am  |  Updated: August 13, 2010 - 7:34am on Savannah Morning News By Pamela E. Walck

Posted: August 11, 2010 - 11:18pm  |  Updated: August 12, 2010 - 6:31am by SavannahNow.com

THE QUESTION about whether Savannah bars should go smokeless isn't a case of restricting rights for businesses that cater to the public.

Instead, it's a matter of boosting public health.

For that reason, we support the effort to snuff out smoking inside local drinking establishments. Clearing the air - literally - will be a breath of fresh air for many workers forced to breathe secondhand smoke as a condition of their employment and for customers who don't like to mix their Jack Daniels with the Marlboro Man.

At the same time, however, we encourage Savannah City Council to be sensible about how the proposed restriction would be applied.

A measure to ban smoking is bars is expected to be introduced at today's scheduled City Council meeting and have its first reading. The council has already held two public meetings on the proposal. Thus no one can accuse elected officials of not giving everyone in the hospitality industry an opportunity to voice their opinions.

Here's ours: Pass the ordinance. It's a logical extension of the city's 1994 ordinance that requires smoke-free areas in restaurants and public places and a similar statewide law adopted in 2005.

The public and the business community have embraced those restrictions, which some officials and groups initially opposed 16 years ago. It's noteworthy that the Georgia Restaurant Association first opposed a smoking ban in the city's bars. Now, the organization supports it, as long as smoking is permitted on outside patios - a reasonable compromise.

Tobacco is a legal product. Individuals have the free choice whether to light up. At the same time, everyone knows that smoking is bad for your health. So is breathing someone else's smoke.

As a public policy matter, governments should be allowed to impose health, safety and quality of life rules for the common good - restaurant health inspections, noise and occupancy limits and workplace safety requirements, just to name a few. Thus the argument that the city should butt out when it comes to smoking in business establishments where people work and congregate doesn't hold much water.

Requiring bar patrons to take their smoking outside (at least 10 feet from the entrance, not 20 feet as the proposed ordinance states) wouldn't be a huge imposition. Officials should consider exemptions for retail tobacco shops that don't have food permits and whose primary purpose is selling tobacco products and for cigar or hookah bars that generate at least 30 percent of their gross revenues from tobacco.

That's what Charleston, S.C., has done since 2007. A spokeswoman for that city's chamber of commerce indicated that the smoking ban has had no ill effects on local businesses.

Private clubs should be exempted, too. Interestingly, however, Healthy Savannah, the main group behind the ordinance, reports that many if not most private clubs here don't allow smoking. That's a positive indication of the way things are going in a nation where 82 percent of Americans don't smoke.

A long list of health organizations supports extending the smoking ban to bars. The City Council should put it's stamp of approval on it, too.

Interchange fee reform has long been a priority for the restaurant industry. Merchants pay about $48 billion in interchange fees every year. For restaurants, interchange fees are often the third greatest operating expense, behind labor and food costs.

This summer, the Georgia Restaurant Association (GRA) and National Restaurant Association (NRA) hailed a major victory for restaurants and other merchants with the Senate’s approval of the interchange fee provision of the financial reform bill. The Wall Street Reform and Consumer Protection Act (H.R. 4173) passed 60-39 and was signed into law by President Obama on July 26.

Effective immediately, the bill allows you to:

• Set minimum amounts ($10 or higher per transaction) for credit card usage. Setting minimum transaction levels is currently prohibited, although most operators lose money on small credit card transactions.
• Offer discounts to customers that pay with cash, checks or debit cards, thus reducing the interchange fees you pay on credit card transactions.  

The bill also authorizes the Federal Reserve to issue regulations that ensure interchange fees imposed on debit card transactions are "reasonable and proportional."  Debit cards are more like checks than credit cards and should not be subject to the level of interchange fees currently charged. The Federal Reserve must issue these regulations by April 2011 and they will become effective in July 2011.

We are pleased that Congress recognized the need for fairer debit-card interchange fees and more flexibility for merchants in credit-card practices. The Association will continue to monitor these regulations and keep you up to date with any developments.

Posted: July 29, 2010 by SavannahNow.com

Barbara Allison Simpson wants to walk up to a business without swatting away clouds of smoke. She wants a tougher city ordinance on smoking.

Sandra Andra Pettigrew and her husband, Bob, would prefer the government keep out of bars and stay out of their lives.

Their opposing viewpoints brought them to the same location Wednesday night: The city of Savannah's quarterly Town Hall meeting at the Civic Center, which included a public hearing on a proposed ordinance that would further restrict smoking in public places.

The line formed quickly when Mayor Pro Tem Edna Jackson explained speakers would have only 30 minutes to make their comments so that other citizens could be heard on other issues. Health care workers, asthma sufferers and schoolchildren encouraged passage and outnumbered speakers opposed; business owners and those calling it an infringement on personal freedom want it snuffed.

One person's relaxation can be another's undoing. When Simpson is exposed to cigarette smoke, it triggers an allergic reaction. She takes allergy shots twice a month and carries an inhaler. Smoke seems to be everywhere.

"Even when I walk down the street, folks are driving with their hands out the window to let their cigarette smoke blow away," she said. "Having a space at a door helps me breathe, so thank you."

Elizabeth Myers, a cancer survivor, carried evidence of her plight around her neck. She displayed inhalers on ribbons around her neck. Passing the ordinance would mean she could go into bars to listen to her husband, a blues musician, something she can't do now.

The ordinance would close loopholes allowed in a 2005 state law, Georgia Smoke Free Air Act, including banning smoking in bars, long-term care facilities, retail tobacco stores and within 20 feet of entrances to public buildings and businesses.

The very idea upsets Richard Mika, who said he has grown tired of Savannah's over-regulation he moved to Statesboro. He still owns 12 properties in Savannah, and that gave him ground to speak his mind, he said.

"They will not tell me what I can do on my own property unless they are going to pay my property taxes, my business taxes and my payroll taxes," he said. "This is not a fascist society."

The discussion has activated groups for and against. Healthy Savannah introduced the ordinance to council with the backing of the American Lung Association and American Cancer Society, saying the added restrictions are needed to reduce the risk of second hand smoke exposure, particularly for workers who have no way to escape a smoky work environment.

Amy Hughes, chairwoman of Smoke Free Savannah, a subcommittee of Healthy Savannah, counters that in cities where smoke-free ordinances have been passed, studies show that business revenues have increased.

Groups such as The International Premium Cigar and Pipe Retailers Association have begun rallying opposition, countering that the ordinance is an effort to ban a legal activity and could be another burden on businesses struggling financially.

One group that has changed its position is the Georgia Restaurant Association. Initially opposed, Mike Vaquer, who heads the association, wants the city to consider easing outdoor restrictions by allowing smoking on outdoor patios. Local restaurants, he said are confident customers would stay with them even if more restrictions were put in place.

Several downtown bar employees at a hearing last week worried that a city-only ban would drive customers to watering holes in Pooler or the islands.

The Pettigrews think it would change their social life.

"We're tired of the government telling us how and when we can do a thing," Bob Pettigrew said. "They're trying to tear us apart as a couple. She'd have to go outside."

"That's my unwinding time with him," Sandra Pettigrew said. "He drinks and I drink water and smoke. That's my outlet other than alcohol."

Healthy Savannah does plan to introduce a similar ordinance for all of Chatham County.

Opponents also have been vocal in their assertion that asking smokers to step outside would turn Savannah's sidewalks and squares into smoke-filled, butt-littered avenues along which few pedestrians would want to tread.

By Lesley Conn

Published: July 28, 2010 by WSAV-TV

SAVANNAH, Ga. --

A proposal to limit where smokers in Savannah can light up continued to draw loud support and opposition Wednesday night.

The proposed ordinance would ban smoking in all Savannah workplaces, including bars. Areas within 20 feet of business entrances, playgrounds, bus stops, and outdoor restaurant seating would also be off limits.

About 30 people lined up at the city's quarterly town hall meeting Wednesday night to voice their opinion.

Several business owners have raised both economic and safety concerns about the plan.

"My own office building that I bought and paid for in cash, and tell me what I can do with my business... It is a lawful activity," said one man.

"Addressing public safety... what happens if you've got groups of 30, 40 people, somebody accidentally steps out off the sidewalk and is hit by an automobile," said Steve Hardy.

But health officials said there is no proof that smoking bans in other cities have hurt business.

"Smoke free policies are not bad for businesses. There are numerous economic impact studies... that show there is no apparent impact or a positive impact when municipalities pass smoke-free laws," said Amy Hughes from Healthy Savannah.

Other citizens had personal reasons for speaking out both for and against the measure.

"He died at the age of 44 from sudden cardiac death. That could've been prevented," said one woman in reference to her late husband.

"Choice is out there. It exists right now. People need to take advantage of that without the government getting involved on any level," said a man who opposed the ban.

The Georgia Restaurant Association stood in support of the ban, with reservations.

"The way the law is written or the proposed law is written, it would prohibit an individual from smoking within 20 feet of the entrance of facility that is open, and 20 feet from a  facility that is closed or not even occupied," said Mike Vacquer with the GRA.

Wednesday night was the second public meeting about the proposed smoking ban.

If you missed it, you can still submit your comments online in writing to city leaders. To submit your comments, click here.

To read the draft of the proposed smoking ban, click here.

The city will have a formal first reading of the proposed ordinance in August. A vote has not yet been scheduled.\

By Tuquyen Mach

Yesterday, by a vote of 60-39, the Senate passed H.R. 4173, the Wall Street Reform and Consumer Protection Act.  The House passed the bill two weeks ago and President Obama will sign the bill into law sometime next week.  All Democratic Senators voted for the bill with the except of Russ Feingold (WI).  The only Republican Senators voting for the bill were Scott Brown (MA), Olympia Snowe (ME), and Susan Collins (ME).

Our Action Alert on the bill generated over 1,800 NRA-member contacts with Senators, including many with previously undecided Senators Brown, Snowe, Collins, and Cantwell (D-WA)----each of whom ultimately supported the bill.

Included in the bill is a modified version of the NRA-supported Durbin Amendment, which makes the following  changes affecting merchant debit card fees and credit card acceptance practices:

• The Federal Reserve will issue regulations to ensure interchange fees on debit card transacations are "reasonable and proportional" to the cost of processing such transactions.

• Merchants will be able to set minimum amounts for credit card usage as long as the minimum does not exceed $10 per transaction.

• Merchants will be able to offer customers discounts for use of cash, checks, and debit cards.

The bill also includes an NRA-supported provision requiring the newly established Consumer Financial Protection Bureau (CFPB) to include a review and recommendations from a small business advocacy review panel of any proposed rules that will significantly impact small businesses.  The CFPB will also have to inform the public how its rules impact the ability of small businesses to obtain access to credit.  We were successful in eliminating language included in the House-passed bill that would have granted enhanced regulatory authority to the Federal Trade Commission (FTC), which would have been able to write rules directed at the restaurant industry with no procedural safeguards and with the potential for multi-million dollar civil penalties.   

Press release from NRA