Vol. 8, No. 21 – October 12, 2009

The “Fall Fling” is the Annual meeting of MLA members. It's FREE to members - a $225 value. Thanks to members’ enthusiastic response, we are continuing this outstanding event and it keeps getting better. This year’s seminar on Friday, November 6, will be “Make Your Spot Shine” – presented by Phil Mitchell, of Discovery-Based Retail.

When the market turns, will you be ready with an effective store design that will attract buyers? Now, is the time to prepare and that’s why we’ve scheduled Phil Mitchell with Discovery-Based Retail, to give us cutting-edge ideas on making your retail location a “destination.”

You’ve invested tons of time and money in your business. You’re extremely proud of it, as well you should be. But here is the awful truth: In the retail world in which you operate, your business is simply a spot – one of many choices available to your current and potential customers. Get ready to participate in a seminar that will help you learn how to “Make Your Spot Shine.”

Differentiation is a word that is bantered about in the retail industry, but here’s the scoop: Differentiation is more than just a “hot phrase.” In fact, the way you differentiate your business and make it relevant to your customers will determine, in large part, how successful your business will be.

Historically, the problem has been that casual thinking leads one to believe that there is almost a limitless number of ways you can try to separate your business from the crowd. That thought process is simply wrong.

In his presentation titled “Make Your Spot Shine,” Phil Mitchell will share with you the secret of the “6 Ps,” which are key elements that differentiate a store and increase its appeal to current and potential customers. Once you clearly understand the 6-P thought process, it becomes much easier to focus on the elements of customer interface. In fact, grasp the 6 Ps and you should be immediately able to develop real strategies for increasing your business.

“Make Your Spot Shine” is a fun, fast-moving presentation that will include group participation so come prepared to share and learn!

For more information, call Olivia at 800-747-6529, or visit our web site at www.TheMLA.com.

NEWS FROM NATIONAL

Support Builds for Extension of Homebuyer Tax Credit… Senate Majority Leader Harry Reid (D-NV) last week joined Sens. Benjamin Cardin (D-MD) and John Ensign (R-NV) in sponsoring legislation (S. 1678) to extend the first-time home buyer tax credit for six months, and allow buyers to claim the credit for either 2008 or 2009. Staunch housing advocate Sen. Johnny Isakson (R-GA) and Sen. Debbie Stabenow (D-MI) have also cosponsored the bill.

NLBMDA has previously urged House and Senate tax committees to extend the credit for one year and expand its eligibility to all home buyers, not just first-time purchasers. The Senate Finance Committee may take up the issue in a tax package later this fall, but is currently preoccupied with the health care debate. NLBMDA will continue to work with legislators to ensure the credit is extended prior to the Nov. 30 deadline of the current credit, to maintain the early signs of recovery in the housing market. Visit www.BuildtheVote.org to urge your legislators to support the extension.

Baucus Health Care Plan Includes Onerous 1099 Reporting Provision… As anticipated, the Baucus health care plan also includes a corporate reporting requirement as one of the revenue raising provisions to pay for health care reform. The plan, as we’ve reported previously, would require all businesses to issue 1099s to all corporations from whom they purchase goods or services. As introduced in the Senate bill, there would be a $600 threshold for each vendor, posing a further administrative burden as companies would have to track spending for each vendor to determine when the threshold was reached.

NLBMDA is working with its small business allies on this issue and will be vigorously opposing this measure.

Rumors Continue to Fly on Card Check… Senators speaking to union conferences last week continued to assert that support is building for a so-called “compromise” that may remove the card check component of the “Employee Free Choice Act” but still make it easier for employees to form a union by limiting the time for employers to respond and still including dangerous binding arbitration requirements.

A vote in the Massachusetts state legislature this week could soon send a temporary replacement for the late Sen. Ted Kennedy to the Senate, giving the Democrats a 60th vote and building momentum for a vote on some version of the bill before the end of the year. Dealers should continue to contact their Senators to urge them to hold firm against the “Employee Free Choice Act” in any form. Visit www.Buildthevote.org to send an email message today.

Bill Introduced to Establish National Formaldehyde Standard… Legislation was recently introduced by Sens. Amy Klobuchar (D-MN) and Mike Crapo (R-ID) to establish a national standard for product emission ceilings and to direct the EPA to promulgate a national formaldehyde rule for composite wood products by 2011. The legislation is based on the California Air Resources Board (CARB) regulation enacted last year and appears to be an effort to impose California's standard on the rest of the country rather than go through a lengthy rulemaking process at the EPA. The legislation, S. 1660, has been referred to the Environment and Public Works Committee.

IRS Highlights Taxability of Personal Use of Employer-Provided Cell Phones… A recent issue has been highlighted by the IRS in the personal use of employer-provided cell phones. A little-known rule currently requires that where an employee uses the employer-provided cell phone for personal purposes (i.e., only a portion can be substantiated as business use), the fair market value of such personal use is includable in the employee’s gross income.

The ramification for the business is the additional FICA tax (7.15 percent) on the amount of imputed income. In addition, the business will lose a portion (or all, if no substantiation) of the deduction for the cost of the purchase of the telephone (probably a Section 179 direct expensing deduction for the full amount, but a depreciation deduction over ten years otherwise) and lose a portion (or all, if no substantiation) of the deduction for the on-going service charges. Since some or all of those expenses will now be income to the employee, those expenses should still be deductible as wages, and the business exposure should be limited to the employer's FICA tax on imputed income equivalent of those costs.

The IRS is currently considering options for simplifying reporting of personal use, while legislation has also been introduced to eliminate the reporting requirement. The “Modernize Our Bookkeeping in the Law for Employees’ Cell Phone Act” (H.R. 690/S.144) was introduced in the House by Rep. Sam Johnson (R-TX) and in the Senate, by Sens. John Kerry (D-MA) and John Ensign (R-NV), but no committee action has yet been scheduled.

Source: NLBMDA E-Update, September 21, 2009

ESTATE TAX RELIEF?

As you probably know, under the current estate-tax exemptions, the estate tax will be suspended in 2010. Therefore, it’s likely some form of estate tax legislation will be passed sometime before the end of the year.

The exemption now stands at $3.5 million and the top tax rate at 45 percent. Under current law, the estate tax will be repealed at the end of this year, but only for 2010. If no action is taken, it will revert to 2001 levels in 2011. This would reduce the exemption to $1 million and raise the top tax rate to 55 percent.

The North American Retail Hardware Association (NRHA) is joining with members of the Small Business Legislative Council (SBLC) in the Permanent Estate Tax Relief Now Coalition to encourage Congress to act quickly to change federal estate tax law.

In a recent press release, the coalition called on Congress to “adopt a permanent individual exemption of $3.5 million (indexed for inflation) from the estate tax and a top marginal estate tax rate of 45%.”

The National Lumber and Building Material Dealers Association (NLBMDA) Legislative Committee took a position on estate tax at their recent Industry Summit in Phoenix. NLBMDA is calling for a permanent estate-tax exemption on small family-owned businesses.

Source: Parts of this article are from the NRHA eNewsletter, September 20, 2009

SAVE THE DATE

Nov. 5-6 – MLA Fall Fling – Kansas City, Mo.

Jan. 7-8 – MLDAC Winter Meeting – Columbia, Mo.

Jan. 14-15 – KYL Dealer Winter Meeting – Pratt, Kan.

March 15-17 – NLBMDA Legislative Conference, Washington, D.C.

Call the MLA Office – 800-747-6529 – for additional information or email: mail@themla.com

LUMBER NEWS – QUICK GLIMPSES

Unemployment Benefits Extended… The House passed a bill to extend emergency unemployment insurance benefits for 13 weeks in states with an unemployment rate of at least 8.5%. It would extend for one year the Federal Unemployment Tax Act surtax and require reporting on newly hired employees to include the start date to reduce unemployment insurance overpayments. The Senate planned to act quickly to approve the legislation.

Source: NRHA eNewsletter, September 27, 2009

Housing Slowdown Dooms Hardware Store… Durkin’s Hardware, an independent hardware store in Eudora, Kan., will close its doors at the end of October due to the decline in housing starts. Owner John Durkin told The Eudora News that sales have suffered ever since the slowdown in new home construction, which contributed to the demise of several other businesses in town.

Only 12 homes were built in Eudora in 2008, up from the nine single-family units the previous year, according to the article. When Durkin opened his store in 2004, housing starts had reached 108 units. The year before, 117 homes were built in the city.

Durkin told the newspaper it was especially difficult to operate a hardware store in a town that’s considered a bedroom community.

Source: HCN Hardware Store Digest, September 28, 2009

Canada to Pay Full Amount of Softwood Lumber Agreement Breach Penalty… The London Court of International Arbitration rejected Canada’s bid to pay US$46.7 million in compensation for breaching a trade agreement with the United States. The tribunal ruled Canada will have to pay the U.S. $68 million instead.

Steve Swanson, chairman of the Coalition for Fair Lumber Imports, said “The Coalition is pleased that the LCIA panel soundly rejected Canada’s argument that it had cured its breach of the SLA by offering a one-time Canadian government payment to the U.S. government.”

Source: LBM Daily, September 29, 2009

Summer Help Leads to Big Fine for New York Dealer… An upstate New York dealer is facing $61,710 in fines after being investigated by the U.S. Department of Labor. The federal agency hit Tremont Lumber in Averill, N.Y. with the fines after it found the dealer employing eight teens ranging in age from 15 to 17. The department said it found the teens splitting and stacking firewood, operating log splitters, forklifts, and a circular saw, according to report by Fox 23 News in Albany, N.Y. Read More.

Source: ProSales Business Update, September 30, 2009

Six Tips for Handling a Tough Conversation… To speak with someone about their bad behavior, hold the conversation in private and in person, Joseph Grenny writes. Also, be positive in your approach to avoid defensiveness from the other person; tentatively describe the problem; focus on the facts; ask for the other person’s viewpoint; and be respectful no matter the person’s rank.

Source: SmartBrief on Workforce, U.S. Chamber of Commerce, October 1, 2009

Lacey Act Enters Second Phase… Five months ago the U.S. Lacey Act officially began requiring declarations for plants and plant products. Now the second phase has begun, in which wood products and timber importers must declare, among other things, the value of their products to the USDA’s Animal and Plant Health Inspection Service (APHIS).

Source: LBM Daily, October 2, 2009

Climate/Energy Legislation… When Congress reconvened after the August recess, it quickly became apparent that health care legislation would be at the top of the agenda for the Administration and Congress, pushing Senate consideration of H.R. 2454, the American Clean Energy & Security Act back into mid-October at earliest. Majority Leader Harry Reid (D-NV) originally set September 18^th as a deadline for all Senate Committees to take action on the combined climate and energy bill. Yesterday, Senators Barbara Boxer (D-CA) and John Kerry (D-MA) released an 821-page draft bill on climate change that would, among other things, mandate that carbon emissions be cut by 20 percent from 2005 levels by 2020, a more hard line goal than the 17 percent reduction in a bill passed by the House in June. The Boxer-Kerry draft retains the House bills’ long-term requirement of 80% reductions by 2050.

Source: AF&PA Grassroots Newsletter, September 2, 2009

Economic Indicators… Real gross domestic product (GDP) decreased at an annual rate of 0.7% in the second quarter of 2009. This follows a decrease of 6.4% in the first quarter. (Commerce Dept.)

Source: NRHA eNewsletter, October 4, 2009

Homebuyer Tax Credit Deadline Looming… With the $8,000 first-time homebuyer tax credit set to expire at the end of November, there have been positive statements made by Senate Majority Leader Harry Reid (D-NV) and House Ways and Means Chairman Charlie Rangel (D-NY) indicating support for some extension, though they disagree on whether to extend the credit for six months or a full year.

Some members of Congress are also insisting that the extension be fully offset by revenue-generating provisions, which could prove challenging. The House Small Business Committee will hold a hearing this Wednesday to discuss the role of the tax credit in stabilizing housing, while the Senate Banking, Housing and Urban Affairs Committee holds a hearing on Thursday to review the mortgage market and housing entities. The Fix Housing First coalition, comprised of many housing and real estate groups and businesses, continues to advocate for a full one-year extension, and expansion to all qualified buyers, to preserve and build on the early signs of recovery we are beginning to witness in the housing market.

Please contact your legislators through BuildtheVote.org today to urge their continued attention to this critical issue.

Source: NLBMDA E-Update, October 5, 2009

Chilean Forestry Production Halted by Strikes… Subcontractor strikes in Chile have shut down forestry production at 10 pulp mill, sawmill, and paneling plant sites owned by Arauco rather than evict the striking workers, which was disallowed by the Chilean government. Workers are negotiating an increase in their base salary to $250,000 Chilean pesos (US$458), along with monthly bonuses.

Source: LBM Daily, October 6, 2009

Groups Decry USGBC’s New Plan for Certifying Wood… Initial responses to the U.S. Green Building Council’s proposed revisions of how wood qualifies under its LEED green building scheme indicate the principal wood certification groups are still unhappy – for much different reasons – over how USGBC is handling the issue. Read more.

Source: ProSales Business Update, October 7, 2009

White House and Congressional Members Discuss Next Steps for the Economy… The President and top Congressional Democrats met yesterday to discuss ways to bolster the flagging U.S. economy, including tax cuts for businesses that hire new workers and extending social safety-net programs, among others.

"Today's meeting with the president reinforces our shared commitment to creating more jobs and providing relief to the millions of Americans who are out of work," Congressman Reid said in a statement.

Source: LBM Daily, October 8, 2009

Survivor’s Guide to Efficiency

Employees today are being asked to do more with less support, particularly at firms where workforce reductions have occurred. While it’s great to still have a job in this economic climate, layoff survivors face no shortage of formidable challenges.

Time-strapped workers are left to perform their regular jobs, while absorbing the unfinished assignments and potentially unfamiliar daily tasks of former colleagues. If you’re struggling to get a handle on your increased workload, the following time-management tips will help you maintain your sanity and boost your efficiency:

Get your priorities in order. First and foremost, check with your manager to outline and prioritize your new and existing duties. In times of transition, it’s always better to seek clarification than to make assumptions. Once you have a complete list of responsibilities, organize your projects in order of urgency and importance. This upfront investment of time will save you hours over the long term.

Clean up your act. The benefits of an orderly workspace can’t be overstated. You can’t afford to waste time hunting for critical documents buried under a crumpled mass of outdated memos and sticky notes. After making an initial clean sweep, schedule time weekly to cut the clutter. Once you’ve categorized a document, get into the habit of filing it, trashing it or forwarding it to the appropriate person – don’t leave it on your desk to collect dust.

Minimize multitasking. Despite your best intentions, you can’t focus on producing a top-notch report while simultaneously preparing for a meeting and emailing your boss. Create a daily game plan each morning and do your best to cross items off your to-do list one by one. When working on an assignment, give it your undivided attention so you do it right the first time. Multitasking frequently leads to errors and oversights, minimizing your overall effectiveness.

Be a team player. Instead of being competitive with your fellow layoff survivors, pull together and work as allies. There’s no better way to foster goodwill than to pitch in and assist overworked coworkers. By lending a hand when you can, you’ll likely receive much-needed help when you’re swamped and a pressing project lands on your desk. (Courtesy of Robert Half International.)

Source: NACM eNews Weekly, September 29, 2009

What Drives Health Insurance Rates?

There are many news stories nowadays discussing the increasing costs of health insurance —without discussing the cause. While there are countless little reasons why costs increase, most can be lumped into four big categories:

1. Price increases. Ultimately, most health insurance dollars are used to pay salaries of doctors, nurses, and other medical staff. As long as their salaries go up, the cost of their services will increase.

2. Utilization increases. Americans use more and more services each year. This is due to several factors:

An aging population
Increased prescription drug use
Increased awareness of certain procedures and conditions

3. Intensity increases. Technology has improved the quality and longevity of life, resulting in more advanced procedures and prescription drugs. These all contribute to the increasing cost of care, for example:

MRIs instead of X-rays
Prilosec® instead of TUMS®
Million-dollar burn treatments, where the patient would have died 10 years ago

4. Cost shifting. Unlike private insurers, Medicare and Medicaid dictate the prices they pay to doctors and hospitals – which often are not enough to cover their costs. Providers must raise their prices to insurance carriers to cover the shortfall.

Keep these causes in mind the next time you run across an item on rising health insurance costs.

This article provided courtesy of Federated Mutual Insurance Company, your association’s recommended insurer.

MLA is proud to endorse….