February 15 Michigan Retailer

4

Cheers for Fairness

Local retailers react positively to Gov. Snyder and lawmakers turning Main Street Fairness legislation into law.

Page 4

5

New Buy Nearby Award

DTE Energy, title sponsor of MRA’s Buy Nearby campaign the first two years, received the first Buy Nearby Award.

Page 9

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Voters to Decide Sales Tax Hike

Michigan voters will decide whether to increase the sales tax to pay for road repairs and education funding.

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® February 2015 Vol. 40 No. 1

The official publication of Michigan Retailers Association

www.retailers.com

FAIRNESS, FINALLY! Michigan will begin leveling the retail playing field this fall when online giant Amazon and other out-of-state merchants will be required to follow the same sales tax collection rules as Main Street retailers.

Governor Rick Snyder signed Michigan Retailers Association’s Main Street Fairness legislation into law on January 15, capping MRA’s decadeslong quest to close the tax loophole that favors out-of-state merchants over Michigan retail businesses.

The bipartisan legislation, enacted by lawmakers in the final, frantic hours of the 2013-14 session, takes effect October 1.

“This is history-making legislation and a great victory for the home team,” said MRA President and CEO James P. Hallan.

“The governor and lawmakers agreed the state should no longer give ‘remote sellers’ a built-in 6 percent price advantage over our Michigan-based retailers.

“On behalf of the thousands of Michigan retail businesses and their hundreds of thousands of Michigan workers, MRA thanks lawmakers for stepping up and doing the right thing, the fair thing.”

During a public signing ceremony in his office, Gov. Snyder said the current situation is “not fair” to Michigan businesses.

“This Main Street Fairness legislation levels the playing field for local businesses, helping Michigan job providers better compete with online retailers.

“Local, brick-and-mortar businessContinued in column 4

“A great victory for the home team.”

MRA President and CEO James P. Hallan Continued from column 1

es drive our economy, and without implementing this fix they would continue to serve as showrooms for online retailers.”

years of service to the retail and services industry and wish the Association continued growth,” concludes a special tribute signed

by Governor Rick Snyder, new Speaker of the House Kevin Cotter and Senate Majority Leader Arlan Meekhoff.

Speaker Cotter presented the framed tribute to the Board of Directors at the board’s January 20 meeting.

The tribute recognizes MRA for its industry leadership, legislative achievements, membership services, Buy Nearby campaign and

Local Retailers On stage representing local retailers at the ceremony were MRA board members Barb Stein, of Great Northern Trading Co., in Rockford, and Becky Beauchine Kulka, of Becky Beauchine Kulka Diamonds and Fine Jewelry in Okemos.

“It’s not just retail businesses that will benefit from this legislation,” said Stein. “We are part of the fabric of our communities, and our communities and residents are hurt when we are hurt by unfair competition.

“All we asked for was that out-ofstate merchants no longer be given an unfair competitive advantage over those of us doing business here in Michigan. And that’s what this legislation does. It treats us fairly.”

Two of the three bill sponsors were on hand for the event.

Sen. Jim Ananich (D-Flint), whose Senate bills were adopted by both houses in the waning hours of the session, said the measure will benefit retail businesses and ensure retail workers continue to have jobs.

“It’s a win-win for everyone in our state,” he said.

Former Rep. Eileen Kowall (R-White Lake Township), who was term lim-

Continued on page 9

Continued on page 8

Gov. Snyder signs the Main Street Fairness bills. Standing, from left: Lt. Gov. Brian Calley, Okemos jeweler and MRA board member Becky Beauchine Kulka, former State Rep. Eileen Kowall, Senate Minority Leader Jim Ananich, Rockford retailer and MRA board member Barb Stein, and MRA President and CEO James P. Hallan.

Photo by David Trumpie

MRA celebrates 75 years, receives legislative tribute Michigan Retailers Association observes its 75th anniversary this year, a fact duly noted by the state’s top political leaders.

“We, the leaders of the 98th session of the Michigan Legislature, do hereby pay tribute to the Michigan Retailers Association for 75

2

Michigan Retailer

Remaining true to our founders’ values

by James P. Hallan, MRA President and Chief Executive Officer Every story has a beginning, and the first page in the storied history of Michigan Retailers Association began on June 10, 1940. On that day, a number of independent retailers gathered around a table in an office on Woodward Avenue in Detroit to chart the course of a new statewide organization.

Government was starting to regulate retail, and our first leaders concluded correctly that the industry would have greater impact if it spoke with a clear, unified voice.

In 1940, our organization had few assets – no real estate, $1,793.18 in

furniture and fixtures, $5,752.36 cash in the bank – but the aims were lofty.

Our records indicate there were three incorporators: Carl B. Tuttle, of S.S. Kresge Co., Eugene C. White, of Gardner White Co., and Oscar Webber of the J.L. Hudson Company.

Other wellknown retail names on the first board of directors included Milliken, Kositcheck, Sperry, Storrer, Linn, Jackman, Rechlin, Godde,

MRA’s newest hire was already a familiar and trusted face at the Association’s Lansing offices when he started work in January.

Dave Papp, now MRA’s manager of information technology (IT), had been making weekly visits to Lansing for more than 10 years as a senior service technician for an Ann Arbor company in charge of keeping the Association’s computer and other technology systems running smoothly and securely.

MRA has been looking to expand I T c a p a b i l i t i e s , Drumm especially in the merchant processing and insurance arenas, and move those duties inhouse to control costs. That need intersected with Papp’s desire for a new challenge and greater responsibility.

“Hiring Dave was an excellent solution to a situation before it could become a problem,” said William J. Hallan, MRA’ chief operating officer and general counsel.

“We’re very pleased to have Dave on board full-time.”

An Ann Arbor resident, Papp earned a degree in computer engineering from the University of Michigan. While employed at The Learning Center, his clients in addition to MRA included Consumers Energy, DTE Energy and Ford Motor Company.

Ally Nemetz was promoted to director, customer service and data administration on January 1. The move places her in direct supervision of two areas vital to providing members with efficient and accurate delivery of a wide range of membership services.

She joined MRA in January 1997 as

Nemetz

Papp

a customer service representative and was promoted to manager of customer data in September 1997.

A graduate of Suomi College in Hancock, she is a resident of Perry.

Amy Drumm, MRA’s point person in the Capitol on legislative issues, including December’s Main Street Fairness victory, was named director of government affairs on January 1.

She joined MRA in 2012 as legislative coordinator after serving as legislative director for then-State Rep. Sharon Tyler. She was named manager of government affairs in 2013 as she took on additional responsibilities for day-today policy advocacy and monitoring and analysis of legislation.

A Lansing Township resident, she is a graduate of the University of Michigan.

Board of Directors: Dan Marshall

Chair Marshall Music Company, Lansing

James P. Hallan

President and CEO Michigan Retailers Association

Bates, Prichs and Schmidt.

Orin Mazzoni, Jr.

Nimble This year, Michigan Retailers celebrates its 75th anniversary. Like

Peter R. Sobelton

“One thing hasn’t changed – MRA’s commitment to serving the retail industry and helping businesses succeed.”

Papp hiring brings IT work inside; Nemetz, Drumm named directors

www.retailers.com

many of our members, the Association has needed to be nimble in order to survive.

In 1972, the organization was on the verge of bankruptcy and made the bold move to bring Larry Meyer in from Washington, D.C., to right the ship. He did.

I joined in 1985, as MRA’s first general counsel. Because of a very talented team and an entrepreneurial board of directors, we are now the largest state retail association in the country.

O v e r t h e y e a r s , re t a i l h a s changed. Catalog sales have diminished, mall stores have come and gone, chain stores have arrived, downtowns have reinvented themselves and independents, like skilled football running backs, have bobbed and weaved to find a way to hold and grow market share in the new age of the Internet and online retailers.

The business environment of 1940 was far different from today’s – the average weekly wage for a retail sales clerk was $25, the Dow Jones Industrial Average stood at 134 and the 40-hour work week was just being instituted.

Commitment As MRA enters it 75th year, we are also a far different organization, as evidenced by our merchant processing program that now has accounts in all 50 states and our exciting Retailers Insurance Company.

But one thing hasn’t changed – MRA’s commitment to serving the retail industry and helping businesses succeed.

We all stand on the shoulders of others, and I know our founding fathers would be proud of our growth and commitment to values they established in 1940.

Happy 75th Anniversary and continued success to all of our members!

Vice Chair Orin Jewelers, Garden City Treasurer Birmingham

William J. Hallan

Secretary Michigan Retailers Association

Thomas Ungrodt

Past Chair Ideation, Ann Arbor

Brian Ducharme AT&T

Becky Beauchine Kulka

Becky Beauchine Kulka Diamonds and Fine Jewelry, Okemos

Joseph McCurry

Credit Card Group

Larry Mullins

Brandon Tire & Battery, Ortonville

R.D. (Dan) Musser III

Grand Hotel, Mackinac Island

Barb Stein

Great Northern Trading Co., Rockford

Joe Swanson Target Corp.

James Walsh

Meijer, Inc., Grand Rapids

D. Larry Sherman

Board Member Emeritus

Michigan Retailers Services, Inc. Board of Directors: Bo Brines Little Forks Outfitters, Midland

Bill Golden

Golden Shoes, Traverse City

Lisa McCalpine-Wittenmyer Walgreens

James P. Hallan Thomas B. Scott Publisher

Editor

Pat Kerwin

Design Manager

Publication Office: 603 South Washington Avenue Lansing, MI 48933 517.372.5656 or 800.366.3699 Fax: 517.372.1303 www.Retailers.com www.RetailersInsurance.com www.BuyNearbyMI.com

Subscriptions:

Michigan Retailer (USPS 345-780, ISSN 0889-0439) is published in February, April, June, August, October and December for $20 per year by Michigan Retailers Association, 603 South Washington Ave., Lansing, MI 48933. Subscription fees are automatically included in the Michigan Retailers Asociation membership dues. Periodical postage paid at Lansing, Michigan. POSTMASTER: Send address changes to 603 South Washington Ave., Lansing, MI 48933. The Michigan Retailer may be recycled with other white office paper.

February 2015

3

MICHIGAN RETAIL INDEX

Strong December boosts Michigan holiday season of retailers increased sales over the same month last year, while 29 percent recorded declines and 17 percent reported no change.

The results create a seasonally adjusted performance index of 66.5, up from 48.1 in November. A year ago December the Index stood at 50.5.

The 100-point Index gauges the performance of the state’s overall retail industry, based on monthly surveys

Current

conducted by MRA and the Federal Reserve. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.

Looking forward, 49 percent of retailers expect sales during January–March to increase over the same period last year, while 22 percent project a decrease and 29 percent no change.

3-Month

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Performance Index

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80

70

70

60

60

50

50

40

40

30

30

That puts the seasonally adjusted outlook index at 68, up from 64.1 in November. A year ago December the Index stood at 63.3.

Complete results of this month’s Michigan Retail Index—including data on sales, inventory, prices, promotions and hiring—are available at www. retailers.com/mra/news/michiganretail-index.html. The website includes figures dating back to July 1994.

13-14

Outlook Index

80

12-13

2013

2014

700 600

661

658 647 597

536

500

580

400 300

DEC

OCT

NOV

SEP

AUG

JUL

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MAY

APR

MAR

FEB

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Most Michigan retailers reported better holiday sales, thanks to a strong December, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

The average year-to-year change was a 1.1 percent increase for the season, slightly below retailers’ average pre-season prediction of 1.6 percent.

For all of 2014, the average change from the year before was a 1.0 percent increase.

“December was the best month since July, helped by sharply lower gasoline prices, lower unemployment and moderate weather,” said Tom Scott, MRA senior vice president, communications and marketing.

“That boost lifted holiday sales and results for all of 2014, although not as much as expected.”

About a third (32 percent) of retailers reported holiday sales increases above 5 percent. Another 20 percent rang up smaller increases, and 23 percent reported flat sales. A quarter (25 percent) of retailers experienced declines.

The December monthly survey of MRA members showed 54 percent

Seasonally adjusted diffusion index, calculated by adding the percent of respondents indicating increased sales and half the percent indicating no change, and then seasonally adjusting the result using the U.S. Census Bureau’s X-11 Seasonal Adjustment procedure. Index values above 50 generally indicate an increase in activity, while values below 50 indicate a decrease.

200 (millions)

Sep

Oct

Nov

Be sure to complete your online survey each month!

46

Michigan Retailer

www.retailers.com

Local retailers applaud Main Street legislation

by Doug Henze

It happened a couple of years ago, but the experience still sticks in Bill Golden’s memory like broken glass.

While returning $300 worth of boots purchased at Golden Shoes in downtown Traverse City, a customer with a smartphone decided to replace them and avoid paying sales tax.

“She ordered them, while in the store, from Amazon,” Golden recalled.

“She did it right in front of me.”

That’s why Golden and bricks-andmortar retailers across the state are cheering new Michigan legislation

legislation’s limited reach.

“It’s everything I could have asked for from the State of Michigan,” he said.

“Michigan has done the right thing in leveling the playing field to the extent it can, but it’s a brick in the wall.”

Peter Rose, owner of The Chelsea Group, the Wyandotte-based company that operates Chelsea Menswear and Willow Tree Fashions, also sees federal law as the endgame.

But the state-level victory is not to be overlooked, said Rose, who has testified in Lansing about the issue. “ F o r t h re e y e a r s , the pressure has been mounting,” Rose said.

“We’ve gotten the ball rolling. This is a very good day.”

While all Michigan retailers are affected by the current competitive disadvantage, those who sell high-end merchandise especially feel the pinch.

That’s the case both w i t h B e r t We i d n e r, owner of Woodward Rockford retailer and MRA board member Barb Stein Camera in Birmingham, speaks for the retail community during Gov. Snyder‘s and with Kim Volz, cobill-signing ceremony. Photo by David Trumpie owner of The Dive Shop ending the price advantage for some Inc. in Flint. online retailers, including Amazon.

Weidner often sells equipment Starting October 1, they will be reranging from $3,000 to $5,000, while quired to collect sales tax the same customers can spend $2,000 to $3,000 as in-state businesses. for Volz to fully outfit them.

Local merchants have been pushing “That’s a pretty good chunk of lawmakers for years to require Interchange somebody can save if they buy net merchants to collect sales tax. it online,” Volz said. “It’s hurting a lot “I’m happy to see it,” Golden said. of places. We just want to make it fair.”

“It’s just being fair to everybody.

I have to charge sales tax. These More Jobs companies should, too. People are Weidner, who estimates he could supposed to put it on their tax forms. add two more employees if the playAbout 1 percent of the people do it.” ing field were entirely level, figures Golden, who traveled this past June the damage this way: to Washington, D.C., to meet with sev“One million dollars in sales is what eral congressional staffers, expects I’m losing in a year,” he said. “Anya snowballing of state laws to push body in the country – I’ll match your Congress toward federal legislation price. I can’t match the sales tax.” that requires all Internet merchants Weidner said fair competition is to collect state sales tax. good not only for local retailers, but So does Dan Marshall, president for state tax revenues. of Lansing-based Marshall Music Co. “It would be phenomenal for the and chair of the Michigan Retailers whole state,” he said. “They wouldn’t Association Board of Directors. Marhave to do a 7 percent sales tax. They shall has testified before legislative could do the roads just with what committees in Washington and Lanthey’re losing in sales tax.” sing about the need for reform.

Weidner questioned the reasoning “State after state passing these bills of waiting until October to implement is building a momentum that most the state legislation. definitely is going to force federal ac“To me, it can go into effect in 30 tion,” he said. days,” he said. “They’re going to lose six months of potential income.”

Mounting Pressure Volz, who testified in Lansing two Marshall pointed to the Michigan Continued on page 8

February 2015

5

DTE Energy receives first annual Buy Nearby award DTE Energy received the first of what is expected to become an annual award for outstanding support of MRA’s Buy Nearby campaign.

Shell and DTE’s Renze Hoeksema, director of state government affairs, praised the campaign and said they were proud to be part of the statewide effort to support local communities and boost Michigan’s economy.

“We appreciate all you have done for the Buy Nearby campaign and look forward to continuing our work together.”

The Detroit-based electric and natural gas utility has served as title sponsor for the campaign since MRA launched it in 2013.

MRA President and CEO James P. Hallan presented the crystal award to DTE Vice President and DTE Foundation Chairman Fred Shell at the MRA Board of Directors meeting on January 20.

The oval crystal block contains an etched image of the Buy Nearby Guy mascot.

“We appreciate all you have done for the Buy Nearby campaign and look forward to continuing our work together,” Hallan said.

He noted that DTE committed to becoming a sponsor almost immediately after a presentation from MRA.

Dozens of Contributors The year-round campaign is “celebrated” in communities throughout the state on the first Saturday in October. This year that’s October 3.

Sponsorships and individual contributions are welcome. Donations to MRA for Buy Nearby are used exclusively to promote the campaign.

Between July 1 and December 31, 2014, nearly 30 individuals contributed to Buy Nearby.

MRA thanks the following donors from the last half of 2014: Treasure Mart, Carl Johns, Ann Arbor Haigh’s Maple Syrup & Supplies LLC, Larry Haigh, Bellevue Linde Furniture Inc., Dennis Lindeman, Cheboygan Side Street Garage Inc. Dan Hoffenbecker, Chelsea Benchley Amish Furniture & Gifts, Joe Benchley, Clare

DTE Energy’s Fred Shell receives the first Buy Nearby Award from MRA’s James P. Hallan. Photo by David Trumpie

Brooklyn Plumbing Heating & AC Inc., Chad Hagerty, Clarklake Pilgrim Investment Co., D. Larry Sherman, CO Ben Franklin Mooney’s Store Inc., Mike Mooney, East Tawas Farmington Shoe Repairs, Andrew Konjarevich, Farmington

Orin Jewelers Inc., Orin Mazzoni Jr, Garden City Hogan’s Jewelers, Betsy Sanders, Gaylord F David Barney Inc., F D Barney, Grand Rapids Fields Fire Protection Inc., Glenna Field, Grand Rapids Continued on page 11

6

Michigan Retailer

www.retailers.com

MRA neutral on May road, sales tax ballot issue The MRA Board of Directors decided unanimously against taking a position on the May 5 transportation and education ballot proposal that includes a one-penny increase in the state sales tax.

Board members said there are good reasons both for and against the bal-

weight to the opposing positions.”

Hallan pointed to a similar neutral position taken by MRA on the 1994 ballot proposal that increased the sales tax from four cents to six cents on the dollar. The additional two-cent levy was dedicated entirely to education, in return for property tax relief.

Years of Debate Lawmakers on December 19, during the final hours of the 2013-14 legislative session, placed the proposal on the ballot after they and Governor Rick Snyder reach agreement on the package.

The governor and legislators had debated for nearly three years how to raise $1.2 billion annually to fix Michigan’s deteriorating roads and bridges.

If approved by voters, the one-cent sales tax increase to seven cents would take effect June 20, 2015, according to companion legislation enacted as part of the package.

The sales tax question goes to the ballot because the tax rate and how the money is spent are spelled out in the Michigan Constitution and can only be changed by voters.

“The sales tax increase would take effect June 20, 2015.” lot question and there is no consensus among the Association’s membership.

Members have voiced strong opinions on both sides of the issue, while others have urged neutrality.

MRA’s Legislative Committee recommended neutrality to the board after reviewing the proposal in depth and the results of a member survey taken after MRA held a webinar explaining details of the plan to the membership.

“Retailers generally don’t want to see an increase in the sales tax, but they also rely on good roads and an efficient transportation system to move goods and people,” said James P. Hallan, MRA president and CEO. “Different members give different

Complex Package The ballot proposal is complex because it includes pieces to increase funds for road repairs and other transportation improvements, as well as increase money to schools and restore earlier cuts to the Earned Income Credit for low-income families.

The proposal would fund transportation improvements by: • Eliminating the sales tax on gasoline • Switching from the sales tax on gasoline to a 14.9 percent wholesale tax on fuel, with an inflationary adjustment mechanism to provide future increases in the rate • Eliminating depreciation for passenger vehicle registration fees • Increasing fines on overweight trucks • Establishing road construction warranties • Instituting competitive bidding reforms for transportation projects.

The proposal would increase funding for education by: • Raising the sales tax to 7 cents.

Under the constitution, education receives 73 percent of sales tax revenues. The other 27 percent goes to local government (24 percent) and to transportation and the general fund (3 percent)

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• Amending Use Tax distribution to increase funding to schools • Prohibit use of the School Aid Fund for higher education funding.

The proposal also would: • Restore the Earned Income Tax Credit from its current 6 percent level to 20 percent.

May 5 Vote Political observers say lawmakers chose May 5 as the date for several reasons.

First, it would authorize additional money in time for the 2015 construction season.

Second, school elections are already scheduled for that date and could attract a limited and more proeducation group of voters.

Third, the spring thaw and the sea of potholes it brings will be fresh in voters’ minds.

What happens if the ballot proposal fails?

The best answer is that lawmakers must start from square one to put together a new plan to pay for road improvements.

Given that the governor and the House and Senate failed to agree on a plan until striking a last-minute deal, swift action on a new plan is unlikely.

February 2015

7

Free trial of SmartData tool begins in February MRA is rolling out a valuable new sales analysis tool for retail businesses that process their card payment transactions through the Association.

To make it even better, SmartData

by MRA comes with a 90-day free trial.

On February 1, MRA was scheduled to begin providing retailers with weekly data about their customers’ spending in their business.

The information is based on their customers’ credit and debit card purchases and is designed to unlock customer data to help retailers better understand how and when their customers buy from them.

“This type of tool has been used chiefly by large retailers to identify and better target their best customers, allocate resources more effectively and evaluate and adjust their marketing efforts,” said John Mayleben, MRA senior vice president, technology and new product development.

“We believe SmartData by MRA can help our members increase their profits by both boosting sales and using their resources more effectively.”

Weekly Reports The weekly reports are sent via

email and include: • Number of customers, average number of visits per customer and average spending per customer.

This overview enables you to make accurate weekly, monthly and annual comparisons in order to identify trends and take action.

• New customers versus repeat customers. Enables you to quickly determine the effectiveness of your marketing activities, including advertising, special promotions and social media.

• Best customers. Enables you to better identify and serve the needs of your most loyal customers, a key to increasing sales and profitability.

Free Trial There is no charge to members to use SmartData by MRA for the first 90 days.

After the free “test drive,” members can continue using the tool for only $9.95 per month.

For convenience, the fee will be deducted automatically from the member’s merchant account unless the retailer has notified MRA to stop sending the reports.

Members can cancel the service any time during the 90-day free trial,

at no cost to them.

“We expect SmartData by MRA will be a valuable analysis tool for all of our retail members,” Mayleben said.

“We recommend they use the information as many ways as they can

during the free-trial, and if they don’t agree it will continue to provide exceptional value for only $9.95 per month, they can cancel at no cost to them.”

He added, “You don’t get many offers like that in business.”

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Last year, the U.S. District Court for the Eastern District of New York approved the settlement among merchants, Visa®, MasterCard® and other defendants.

The lawsuit claims merchants paid more fees than they should have for accepting Visa and MasterCard as payment from consumers.

To assist you in recovering your share of the settlement, Michigan Retailers Association has part-

nered with MCAG, a class action settlement expert.

This service is meant to simplify and streamline the filing process for you to recover your share of the settlement funds.

MCAG will submit your claim using your historical processing data and will collect an administration fee of 30 percent of the recovered amount. If there is no recovery from the settlement, you will not be charged a fee.

To enroll in this service or for more information, please visit https://mcagvmc.com/portal and enter code MRA100. Or you can contact MRA customer service at 800.563.5981.

8

Michigan Retailer

www.retailers.com

FAIRNESS, FINALLY! Continued from page 1

Michigan’s choice for

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ited out of office at the end of 2014, called it “a great day” and emphasized the importance of shopping at local stores.

Pointing to the years-long battle to get the legislation enacted, she said that in Lansing “there is no such thing as a no-brainer. Sometimes it takes a couple of sessions.”

Rep. Rob VerHeulen (R-Walker), the other House bill sponsor and a strong advocate for the issue, was unable to attend.

Physical Presence Under federal law, an out-of-state merchant is not required to collect a state’s sales tax on goods it sells to that state’s residents unless the remote seller has “nexus” – a physical presence such as a store or warehouse – in that state.

The new Michigan law redefines physical presence to include certain practices that out-of-state companies such as Amazon are using to generate sales in Michigan either online or through phone or catalog sales.

These include selling through subsidiaries, affiliate networks or other persons with substantial nexus in the state.

The new law will not force all outof-state retailers to collect sales tax, only the ones that fall under the new, expanded definition of physical presence. Congressional action is still necessary to require all out-of-state merchants to collect sales tax.

The Michigan Department of Treasury estimates the new law will mean $60 million annually in additional

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sales tax revenue, most of it constitutionally dedicated to schools.

The governor was quick to point out that the additional revenue does not represent a new tax, because purchasers have been required by existing law to pay the sales tax when they file their income tax – but few actually do.

The problem is one of enforcement of a current tax and not creation of a new tax, Snyder said.

Both the governor and Hallan hailed the new law as a giant step forward for Michigan. Some two dozen states have now taken similar collection actions against out-ofstate merchants.

The legislation does not affect Michigan-based retailers who sell remotely to other states.

Explosive Growth MRA has been involved in the fairness issue for several decades, since furniture retailers complained about unfair competition from catalog and drop-ship merchants primarily in North Carolina who escaped collecting Michigan’s sales tax on items sold and delivered to Michigan residents.

This latest push, began in late 2011.

“MRA’s work on this issue in one form or another spans more than 40 years,” Hallan said. “The explosive growth of Internet retailing transformed the problem from an aggravation to a jobs- and businesskilling crisis in our state.

“We’re proud of what Michigan has accomplished here today.”

Local retailers appreciate MSF bills Continued from page 4

years ago, said he is amazed the new legislation has only come together now.

To learn more, ask your Independent Agent, call 800.366.3699 or visit www.RetailersInsurance.com.

1214

Showrooming While they’ve waited for fair policy to come from lawmakers, retailers such as Lynne MacDowell and Barb Stein say they’ve witnessed “showrooming” play out in their stores.

“A customer will come into the store and have a salesman spend a considerable amount of time explaining what they need, what size they need,” said Lynne MacDowell, coowner of MacDowell Fireplace and Floral in Grand Ledge. “Then, they are able to order online for 6 percent less than what we sell them for.

“You want to keep your employees employed. Selling product is how you do that.”

Barb Stein, owner of Great Northern Trading Co. in Rockford and an MRA board member, said she’s had customers tell her they’ll buy in her store if she meets the Internet price.

But that would also require her to pay the sales tax.

“I think it’s fantastic and about time,” she said of the new legislation.

Matthew Norcross, co-owner of McLean & Eakin Booksellers in Petoskey, has been fighting the battle on behalf of Michigan’s retailers and as a board member of the American Booksellers Association. He has traveled to Washington to meet with congressmen or their staff members and has reached out to the news media.

Norcross said “it’s long overdue” that Internet retailers – at least those with some physical presence in Michigan – will be paying their fair share towards improving the state’s infrastructure.

“Obviously, it’s good news – I’m very happy for it,” he said. “The Amazon trucks are tearing up our roads and we need new roads.”

Doug Henze is a freelance writer and former business reporter for the Oakland Press in Pontiac.

February 2015

9

MRA celebrates 75 years, receives legislative tribute

Continued from page 1

other accomplishments.

“Because of its vision and service, Michigan Retailers Association has become the unified voice of retailing in Michigan and the largest state trade association of general merchandise retailers in the nation,” the tribute states.

MRA was founded in Detroit on June 10, 1940, to “do any and all things generally for the promotion and improvement of retail business.”

The new organization was formed in response to issues surrounding the state’s young sales and use taxes.

By 1945 the Association was ready to branch out into providing additional membership services beyond legislative advocacy.

M R A n o w re p re s e n t s some 5,000 member businesses and their more than 15,000 stores and websites.

It provides expert credit card processing services for other associations and organizations and is active in all 50 states.

Speaker of the House Kevin Cotter (right) presents a Special Tribute to MRA President and CEO James P. Hallan in honor of MRA’s 75th anniversary.

Photo by David Trumpie

“There is a reason why we have been helping retailers succeed for 100 years!”

Judson Lynch, Co-CEO, Lynch Sales Company Since 1914, the family-owned Lynch Sales Company has delivered on our promise to help our retail clients succeed through Lynch promotional sales. I am particularly proud that many of those storeowners reward us with their repeat business, time and again.

Contact us for details and receive a special, limited edition 100th anniversary commemorative as our gift. Plus, retailers who hold a Lynch ‘Sale of the Century’ during 2014 automatically become eligible for our Grand Prize of a trip for two to Ireland!

Serving the U.S., Canada and the U.K. Call (800) 824 - 2238 or www.LynchSales.com Copyright 2014 Lynch Brothers Licensing Corporation

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Michigan Retailer

www.retailers.com

LOTTERY

Instant games propel Lottery to record 2014 sales

by M. Scott Bowen, Commissioner

Strong retailer support in 2014 helped the Michigan Lottery post record sales of nearly $2.6 billion. The Lottery’s strong sales in 2014 were due in large part to our lineup of instant games that boosted player interest and generated record sales of $913.2 million, nearly an 11 percent increase from 2013.

With a wide range of price-point offerings, Lottery instant games are designed to appeal to a broad spectrum of players.

Games such as Cashword and Wild Time have built strong brand awareness among the most loyal Lottery players. Games such as Cash for Life appeal to both casual and loyal Lottery players.

Creating innovative game offerings with broad player appeal, large cash prizes and at various price points helps create excitement among players and drive repeat business for our retail partners.

In 2014, the Lotter y’s instant game portfolio accounted for roughly 35 percent of overall ticket sales. The record instant game sales are further proof that players are attracted to games that offer the opportunity to win large cash prizes instantly.

Record Commissions Retailers benefit from players’ desire to win instantly as well. When a player wins a prize and cashes a ticket, many times the prize is used to purchase additional tickets or other items in the store.

The instant game momentum from 2014 has continued into the first quarter of the 2015 fiscal year.

Lottery retailers experienced a record year in 2014 as well. Retailers across the state collected record total commissions in 2014: $188.6 million, up from $178.4 million in 2013, the previous record year.

To continue this momentum, the Lottery plans to continue introducing games that excite players and generate repeat purchases.

Retailers can expect to see several new games in 2015, as well as the re-

launch of games, such as Cash for Life and Wild Time, to keep the instant game business thriving.

Doubler Days March is sure to be an exciting month for Club Keno players and retailers. From March 1 through March 31, each Club Keno ticket purchased is eligible for the Doubler.

The Doubler feature will be printed at random on Club Keno tickets and will double the base game and Kicker prizes for players.

Tickets must be valid Club Keno winners to be eligible for double winnings. Receiving a Doubler message alone does not denote a win. If a player purchases a multi-draw ticket and receives a Doubler message, all winnings for all the drawings on that ticket are doubled.

When a player doubles the winnings with the Doubler, retailers benefit because that increases their redemption commissions.

New Instants These tickets go on sale Feb. 3: IG # 694 Four by 4 $1 IG # 695 Golden Ticket $5

IG # 711 $300 Grand Cashword $5 IG # 716 $1,000,000 Spectacular $10.

New Pull Tabs These tickets go on sale Feb. 3: MI # 545 Blazin’ Cash $.50.

These Pull Tabs games are set to expire: MI # 500 Bragging Rights (Blue) $1 Feb. 9 MI # 501 Bragging Rights (Green) $1 Feb. 9 MI # 596 Stack ‘Em Up $1 Feb. 15 Retailers are reminded to activate all game tickets before putting them on sale to ensure winning tickets may be redeemed by players.

About 97 cents of ever y dollar spent on Lottery tickets is returned to the state in the form of contributions to the state School Aid Fund, prizes to players and commissions to retailers. In the 2014 fiscal year, the Lotter y’s contribution to Michigan’s public schools was $742.8 million.

Since it began in 1972, the Lotter y has contributed nearly $19 billion to education in Michigan. For additional information, please visit the Lottery’s website at www.michiganlottery.com.

Get Ready For Buy Nearby

“Get Caught Blue-Handed Day” Saturday, October 3, 2015

Invite Me to Your Town!

BuyNearbyMI.com

®

February 2015

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NEW MEMBERS Home Appliance Mart Inc., Ann Arbor Burmese American Initiative, Battle Creek Professional Towing Services, LLC, Battle Creek Mecosta County Red Arrow Amvets Post 1941, Big Rapids David R. Barroso DDS PC, Blanchard Shamrock Lounge, Brighton Roaring 20’s Saloon, Cadillac Stephen’s Tire Service, Caro Nancy Whiskey Pub, Dearborn Cliff Bells, Detroit Smitty’s Place, Dimondale Alcatraz, Erie Stop Spot, Ferndale Plaza Party Store, Grand Ledge Fortino’s Party Store, Grand Ledge Derby Inc., Grand Rapids Price Heneveld LLP, Grand Rapids Winter Blast 10K, Grand Rapids MIchigan Adventure Race, Grand Rapids Whoville 5K, Grand Rapids Wolverine Resolution Run, Grand Rapids Ground Hog Marathon, Grand Rapids Yankee Springs Winter Challenge, Grand Rapids Angelo & Riccardo’s Inc., Hesperia Paul’s Silver Dollar Saloon Inc., Higgins Lake J & J Foods Inc., Highland Hospice of Hillsdale County, Hillsdale Community Action House, Holland Colleen Smith, Holt The Rocket, Jackson

J & B Spot Inc., Johannesburg The Cottage Gardens Inc., Lansing Iron Kettle, Lewiston Captain Chucks, Ludington River St. Station, Manistee Country House Catering, Mason Little Brown Jug, Maybee American Legion Berryhill Post 165, Midland Midland Tire Company, Midland Big T’s Road House & Sports Complex, Mio Thomas American Bar & Grill, Monroe Pioneer Quick Lubes Inc., Mount Pleasant Murphy’s Nite Club, Muskegon TPWS Inc., Muskegon Universal Wholesale Plumbing Retail Supply Co., Oak Park Safari Circuits Inc., Otsego Rainbow Bar, Owosso Blue Water Center for Independent Living, Port Huron O’Tees Bar & Grill, Romulus Rothbury Tavern, Rothbury Shoreline Pharmacy, South Haven 39099 Van Dyke Road LLC, Sterling Heights Jan’s Bar, Swartz Creek Tawas Lanes LLC, Tawas City Sunshine Care Home LLC, Three Rivers World Magnetics ACQ Company LLC, Traverse City Gibbs Dental Lab LLC, Twin Lake Hilltop Recreation Inc., Vassar Sunrise Print Communications, West Branch Pioneer Resource Co LLC, Whittemore Johnny on the Spot, Wixom

DTE Energy receives Buy Nearby award Continued from page 2

Borr’s Bootery Inc., Roger A. Bergman, Holland Linn & Owen Jewelers, Stewart Powell, Lansing Andrews Hooper & Pavlik, Jeff Fineis, Okemos Decors by Sandra Inc., Sandra Cluchey, Pentwater Country Casuals, Rod Phillips, Petoskey Genuine Toy Company LLC, Charles Dare, Plymouth Dan & Chuck’s Kar Kare LLC, Dan Martyka, Redford Herman’s Boy Inc., Floyd Havemeier, Rockford

Great Northern Trading Co., Barb Stein, Rockford Katy’s Kards, Kim Sinicki, Saginaw Active One Construction, Rocky & Michelle Bond, Saline Props, Beth Schulckbier, South Haven South Lyon Cycle & Sports Inc., Mark Childs, South Lyon Service Floor Covering, Bryan J Mazey, St. Clair Shores Mack-Alger Tire, William Spreder, St. Clair Shores D & D Gunsmith Ltd., Dan Kurkowski, Troy

Missouri retailer wins Lynch trip The owners of Shubert Furniture in Manchester, Missouri, won the drawing for a weeklong holiday in Ireland, courtesy of the Lynch Sales Company in Grand Rapids.

Lynch Sales offered the trip in celebration of its 100-year anniversary. All retailers who held a Lynch Sale in 2014 were eligible for the prize.

‘Main Street’ sponsors are ‘Legislator of Year’ The three lawmakers who sponsored the Main Street Fairness bills and helped maneuver them through the long and difficult legislative process were all named MRA’s Legislator of the Year for 2014.

They are: Sen. Jim Ananich (D-Flint), Rep. Eileen Kowall (R-White Lake Township) and Rep. Rob VerHeulen (R-Walker).

“There are many heroes in the story behind the successful passage of this landmark legislation, but these three

Rep. Eileen Kowall Kowall was first elected to the House in 2008 and recently completed her third and final term. She is

“These three lawmakers stood out because of their leadership and hard work from beginning to end.”

Sen. Ananich

Rep. Kowall

lawmakers stood out because of their leadership and hard work from beginning to end,” said MRA President and CEO James P. Hallan.

“These legislators worked together as a bipartisan group to introduce the bills, round up support and push them to victory in the final hours of the lame-duck session.

“The retail industry thanks them for their dedication and considerable efforts to close the tax loophole that has given out-of-state merchants an unfair advantage over our Michigan businesses for far too many years.”

The MRA Board of Directors acted on the recommendation of its Legislative Committee in selecting the award recipients.

Sen. Jim Ananich Ananich was an original sponsor of the bills in 2011 in the House, where he served two terms. He then introduced both bills in the Senate after winning a special election in 2013.

He was re-elected to a full term in 2014 and chosen by his colleagues to serve as Senate minority leader for the 2015-2016 legislative session.

He has been a vocal supporter of the legislation since its introduction. During the year -end lame-duck session, he was instrumental in gathering support for the bills from Democratic caucus members in both chambers and helped make the argument to include the bills as part of the roads plan. In the end, it was his bills that were adopted during the final, marathon night.

now an elected Oakland County commissioner and may be interested in running for the Senate in 2018 when her husband, Senator Mike Kowall, is term limited.

She was one of the original sponsors in 2011 and sponsored the Main Street Rep. VerHeulen bills again in the 2013-14 legislative session. She fought to set the record straight that the bills would help level the playing field for retailers without raising taxes, since the tax is already owed by the consumer. As former part owner, with her husband, of Accurate Woodworking, Inc., she has experienced firsthand the impact of the state not requiring remote sellers to collect the 6 percent sales tax.

She was a key part of the 2014 success as she worked with her husband to get a hearing and a vote for the Senate legislation in his committee. She and her staff spent countless hours working to perfect the language with the Department of Treasury and other stakeholders.

Rep. Rob VerHeulen VerHeulen was first elected in November 2012 to serve his Grand Rapids area district and was re-elected in 2014. He served many years as an attorney for Meijer Inc. and most recently as general counsel to The Meijer Foundation.

He sponsored one of the bills in the 2013 House package. With his retail background at Meijer, he had a strong interest in closing the loophole and introduced the legislation shortly after taking office.

He also played a major role in crafting the original transportation funding package that focused on user-based fees to fund road repairs.

As one of the few members engaged in the lame-duck roads talks, he was quick to urge that Main Street Fairness play a role in the solution.

Cash for Life Instant Games have been hugely popular in Michigan for years. Now players can experience the same fun and excitement in a brand new draw game, Lucky For Life!

Retailers who sell a Top Prize-winning ticket will receive a $50,000 bonus commission.

Retailers selling a Second Prize-winning ticket will receive a $2,000 bonus commission.