MRA celebrates 75 years,receives legislative tribute

4 65New 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

Voters to Decide Sales Tax HikeMichigan voters will decide whether to increase the sales tax to pay for roadrepairs and education funding. Page 5

Cheers for FairnessLocal retailers react positively to Gov. Snyder and lawmakers turning Main Street Fairness legislation into law.Page 4

Continued on page 9

®

February 2015 Vol. 40 No. 1 The official publication of Michigan Retailers Association

Continued on page 8

Michigan will begin leveling the re-tail 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 Michi-gan Retailers Association’s Main Street Fairness legislation into law on January 15, capping MRA’s decades-long 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 cur-rent situation is “not fair” to Michigan businesses.

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

“Local, brick-and-mortar business-

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

www.retailers.com

FAIRNESS, FINALLY!“A great victory for the home team.”MRA President and CEOJames P. Hallan

Continued in column 4

Continued from column 1

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 ses-sion of the Michigan Legislature, do hereby pay tribute to the Michi-gan Retailers Association for 75

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 Di-rectors at the board’s January 20 meeting.

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

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

Local RetailersOn stage representing local retail-

ers at the ceremony were MRA board members Barb Stein, of Great North-ern 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-of-state merchants no longer be given an unfair competitive advantage over those of us doing business here in Michigan. And that’s what this legis-lation 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 bene-fit 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-

2

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 reg-ulate 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

Michigan Retailer www.retailers.com

by James P. Hallan, MRA President and Chief Executive Officer

Remaining trueto our founders’ values

Board of Directors:

Dan MarshallChair Marshall Music Company, Lansing

James P. HallanPresident and CEOMichigan Retailers Association

Orin Mazzoni, Jr.Vice ChairOrin Jewelers, Garden City

Peter R. SobeltonTreasurerBirmingham

William J. HallanSecretaryMichigan Retailers Association

Thomas UngrodtPast ChairIdeation, Ann Arbor

Brian DucharmeAT&T

Becky Beauchine KulkaBecky Beauchine Kulka Diamonds and Fine Jewelry, Okemos

Joseph McCurryCredit Card Group

Larry MullinsBrandon Tire & Battery, Ortonville

R.D. (Dan) Musser IIIGrand Hotel, Mackinac Island

Barb SteinGreat Northern Trading Co., Rockford

Joe SwansonTarget Corp.

James WalshMeijer, Inc., Grand Rapids

D. Larry ShermanBoard Member Emeritus

Michigan Retailers Services, Inc.Board of Directors:

Bo BrinesLittle Forks Outfitters, Midland

Bill GoldenGolden Shoes, Traverse City

Lisa McCalpine-WittenmyerWalgreens

James P. Hallan Thomas B. ScottPublisher Editor

Pat KerwinDesign Manager

Publication Office:603 South Washington AvenueLansing, MI 48933517.372.5656 or 800.366.3699Fax: 517.372.1303www.Retailers.comwww.RetailersInsurance.comwww.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.

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 C o . , a n d O s -car Webber of the J.L. Hudson Company.

O t h e r w e l l -k n o w n r e t a i l names on the first board of directors included Milliken, Kositcheck, Sperry, Stor-rer, Linn, Jackman, Rechlin, Godde,

Bates, Prichs and Schmidt.

NimbleThis year, Michigan Retailers cel-

ebrates its 75th anniversary. Like

many of our members, the Associa-tion 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 entrepreneur-ial board of directors, we are now the largest state retail association in the country.

Over the years , reta i l has changed. Catalog sales have di-minished, mall stores have come and gone, chain stores have ar-rived, 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 Indus-trial Average stood at 134 and the 40-hour work week was just being instituted.

CommitmentAs MRA enters it 75th year, we are

also a far different organization, as evidenced by our merchant process-ing 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 business-es succeed.

We all stand on the shoulders of others, and I know our founding fa-thers would be proud of our growth and commitment to values they es-tablished in 1940.

Happy 75th Anniversary and con-tinued success to all of our members!

MRA’s newest hire was already a familiar and trusted face at the As-sociation’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 Lan-sing for more than 10 years as a senior service technician for an Ann Arbor company in charge of keeping the Association’s com-p u t e r a n d o t h e r technology systems running smoothly and securely.

M R A h a s b e e n looking to expand I T c a p a b i l i t i e s , especially in the mer-chant processing and insurance arenas, and move those duties in-house to control costs. That need intersected with Papp’s desire for a new challenge and greater re-sponsibility.

“Hiring Dave was an excellent solution to a situation before it could become a problem,” said William J. Hallan, MRA’ chief oper-ating 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 en-gineering from the University of Michigan. While employed at The Learning Center, his clients in ad-dition to MRA included Consumers Energy, DTE Energy and Ford Motor Company.

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

Ally Nemetz was promoted to di-rector, customer service and data administration on January 1. The move places her in direct supervi-sion of two areas vital to providing members with efficient and accurate delivery of a wide range of member-ship services.

She joined MRA in January 1997 as

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

A graduate of Suomi College in Han-cock, 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 gov-ernment affairs in 2013 as she took on additional responsibilities for day-to-day policy advocacy and monitoring and analysis of legislation.

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

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

PappDrumm Nemetz

February 2015 3

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 sea-son, 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 per-cent 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 retail-ers reported holiday sales increases above 5 percent. Another 20 percent rang up smaller increases, and 23 per-cent reported flat sales. A quarter (25 percent) of retailers experienced de-clines.

The December monthly survey of MRA members showed 54 percent

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 ad-justed performance index of 66.5, up from 48.1 in November. A year ago De-cember the Index stood at 50.5.

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

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.

3-Month Outlook Index

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Current Performance Index

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Strong December boosts Michigan holiday seasonMICHIGAN RETAIL INDEX

700

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2013 2014

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658 647597

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Be sure to complete youronline survey each month!

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

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

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/michigan-retail-index.html. The website includes figures dating back to July 1994.

64 Michigan Retailer www.retailers.com

Continued on page 8

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-and-mortar retailers across the state are cheering new Michigan legislation

ending the price advantage for some online retailers, including Amazon. Starting October 1, they will be re-quired to collect sales tax the same as in-state businesses.

Local merchants have been pushing lawmakers for years to require Inter-net merchants to collect sales tax.

“I’m happy to see it,” Golden said. “It’s just being fair to everybody. I have to charge sales tax. These companies should, too. People are supposed to put it on their tax forms. About 1 percent of the people do it.”

Golden, who traveled this past June to Washington, D.C., to meet with sev-eral congressional staffers, expects a snowballing of state laws to push Congress toward federal legislation that requires all Internet merchants to collect state sales tax.

So does Dan Marshall, president of Lansing-based Marshall Music Co. and chair of the Michigan Retailers Association Board of Directors. Mar-shall has testified before legislative committees in Washington and Lan-sing about the need for reform.

“State after state passing these bills is building a momentum that most definitely is going to force federal ac-tion,” he said.

Mounting PressureMarshall pointed to the Michigan

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 compa-ny 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.

“For three years, the pressure has been mounting,” Rose said. “We’ve gotten the ball rolling. This is a very good day.”

While all Michigan re-tailers are affected by the current competitive disadvantage, those who sell high-end mer-chandise especially feel the pinch.

That’s the case both with Bert Weidner, owner of Woodward Camera in Birmingham, and with Kim Volz, co-owner of The Dive Shop

Inc. in Flint. Weidner often sells equipment

ranging from $3,000 to $5,000, while customers can spend $2,000 to $3,000 for Volz to fully outfit them.

“That’s a pretty good chunk of change somebody can save if they buy it online,” Volz said. “It’s hurting a lot of places. We just want to make it fair.”

More JobsWeidner, who estimates he could

add two more employees if the play-ing field were entirely level, figures the damage this way:

“One million dollars in sales is what I’m losing in a year,” he said. “Any-body in the country – I’ll match your price. I can’t match the sales tax.”

Weidner said fair competition is good not only for local retailers, but for state tax revenues.

“It would be phenomenal for the whole state,” he said. “They wouldn’t have to do a 7 percent sales tax. They could do the roads just with what they’re losing in sales tax.”

Weidner questioned the reasoning of waiting until October to implement the state legislation.

“To me, it can go into effect in 30 days,” he said. “They’re going to lose six months of potential income.”

Volz, who testified in Lansing two

Rockford retailer and MRA board member Barb Stein speaks for the retail community during Gov. Snyder‘s bill-signing ceremony. Photo by David Trumpie

Local retailers applaudMain Street legislationby Doug Henze

5February 2015

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

Continued on page 11

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

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 Foun-dation 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 immedi-ately after a presentation from MRA.

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.

Dozens of ContributorsThe year-round campaign

is “celebrated” in communi-ties throughout the state on the first Saturday in Octo-

ber. This year that’s October 3. Sponsorships and individual con-

tributions are welcome. Donations to MRA for Buy Nearby are used ex-clusively to promote the campaign.

Between July 1 and December 31, 2014, nearly 30 individuals contrib-uted to Buy Nearby.

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

DTE Energy receives first annual Buy Nearby award

Brooklyn Plumbing Heating & AC Inc., Chad Hagerty, ClarklakePilgrim Investment Co., D. Larry Sherman, COBen Franklin Mooney’s Store Inc., Mike Mooney, East TawasFarmington Shoe Repairs, Andrew Konjarevich, Farmington

Orin Jewelers Inc., Orin Mazzoni Jr, Garden CityHogan’s Jewelers, Betsy Sanders, GaylordF David Barney Inc., F D Barney, Grand RapidsFields Fire Protection Inc., Glenna Field, Grand Rapids

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

6 Michigan Retailer www.retailers.com

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The MRA Board of Directors de-cided 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-

lot question and there is no consensus among the Association’s membership. Members have voiced strong opinions on both sides of the issue, while oth-ers have urged neutrality.

MRA’s Legislative Committee rec-ommended neutrality to the board after reviewing the proposal in depth and the results of a member survey taken after MRA held a webinar ex-plaining 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

MRA neutral on May road, sales tax ballot issueweight 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 educa-tion, in return for property tax relief.

Years of DebateLawmakers on De-

cember 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 pack-age.

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, ac-cording 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.

Complex PackageThe ballot proposal is complex be-

cause 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 In-come Credit for low-income families.

The proposal would fund transpor-tation improvements by:

• Eliminating the sales tax on gasoline• Switching from the sales tax on gaso-

line to a 14.9 percent wholesale tax on fuel, with an inflationary adjustment mechanism to provide future increases in the rate

• Eliminating depreciation for pas-senger vehicle registration fees

• Increasing fines on overweight trucks

• Establishing road construction warranties

• Instituting competitive bidding reforms for transportation projects.

The proposal would increase fund-ing for education by:

• Raising the sales tax to 7 cents. Under the constitution, education receives 73 percent of sales tax rev-enues. The other 27 percent goes to local government (24 percent) and to transportation and the general fund (3 percent)

• 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 construc-tion season.

Second, school elections are al-ready scheduled for that date and could attract a limited and more pro-education 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.

“The sales tax increase would take effect June 20, 2015.”

7February 2015

MRA is rolling out a valuable new sales analysis tool for retail business-es 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 sched-uled 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 bet-ter understand how and when their customers buy from them.

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

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

Weekly ReportsThe weekly reports are sent via

Free trial of SmartData tool begins in Februaryemail 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 annu-al 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 adver-tising, 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 TrialThere 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 in-formation as many ways as they can

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

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

If your business accepted Visa or MasterCard payments between January 1, 2004, and November 28, 2012, you may be eligible to recover funds from the more than $5 billion settlement in a class-action lawsuit.

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

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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.

Recover your share of $5B settlement

8 Michigan Retailer www.retailers.com

Continued from page 1

Continued from page 4

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FAIRNESS, FINALLY!ited out of office at the end of 2014, called it “a great day” and empha-sized 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 PresenceUnder 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 re-mote seller has “nexus” – a physical presence such as a store or ware-house – 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 gener-ate sales in Michigan either online or through phone or catalog sales.

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

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

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

sales tax revenue, most of it constitu-tionally 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-of-state merchants.

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

Explosive GrowthMRA has been involved in the fair-

ness issue for several decades, since furniture retailers complained about unfair competition from catalog and drop-ship merchants primar-ily in North Carolina who escaped collecting Michigan’s sales tax on items sold and delivered to Michi-gan 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 explo-sive growth of Internet retailing transformed the problem from an aggravation to a jobs- and business-killing crisis in our state.

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

Local retailers appreciate MSF billsyears ago, said he is amazed the new legislation has only come together now.

ShowroomingWhile they’ve waited for fair policy

to come from lawmakers, retailers such as Lynne MacDowell and Barb Stein say they’ve witnessed “show-rooming” play out in their stores.

“A customer will come into the store and have a salesman spend a considerable amount of time explain-ing what they need, what size they need,” said Lynne MacDowell, co-owner 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 North-ern 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 Peto-skey, has been fighting the battle on behalf of Michigan’s retailers and as a board member of the American Book-sellers Association. He has traveled to Washington to meet with congress-men 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 Ama-zon trucks are tearing up our roads and we need new roads.”

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

9

Continued from page 1

February 2015

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.comCopyright 2014 Lynch Brothers Licensing Corporation

“There is a reason why we have

been helping retailers succeed for 100 years!”

Judson Lynch, Co-CEO, Lynch Sales Company

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 re-tailers 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.

MRA celebrates 75 years, receives legislative tribute

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

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

MRA now represents some 5,000 member busi-nesses and their more than 15,000 stores and websites. It provides expert credit card processing services for other associations and orga-nizations and is active in all 50 states.

LOTTERY

by M. Scott Bowen, CommissionerInstant games propel Lottery to record 2014 sales

Strong retail-er support in 2014 helped the Michigan Lot -tery post record sales of nearly $2.6 billion. The Lottery’s strong sa les in 2014 were due in large

part to our lineup of instant games that boosted player interest and gen-erated 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 spec-trum of players.

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

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

In 2014, the Lottery’s instant game portfol io accounted for roughly 35 percent of overall tick-et 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 CommissionsRetailers benefit from players’ de-

sire to win instantly as well. When a player wins a prize and cashes a tick-et, 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 re-cord 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 gener-ate 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 DaysMarch is sure to be an exciting

month for Club Keno players and re-tailers. 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 mes-sage 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 win-nings with the Doubler, retailers benefit because that increases their redemption commissions.

New InstantsThese tickets go on sale Feb. 3:IG # 694 Four by 4 $1

IG # 695 Golden Ticket $5

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

New Pull TabsThese 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. 9MI # 501 Bragging Rights (Green)

$1 Feb. 9MI # 596 Stack ‘Em Up $1 Feb. 15Retailers 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 every 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 Lottery’s contribution to Michigan’s public schools was $742.8 million. Since it began in 1972, the Lottery has contributed nearly $19 billion to education in Michigan. For additional information, please visit the Lottery’s website at www.michiganlottery.com.

10 Michigan Retailer www.retailers.com

Get Ready For Buy Nearby

“Get CaughtBlue-Handed Day”

®

Saturday, October 3, 2015

BuyNearbyMI.com

Invite Meto YourTown!

NEW MEMBERS11February 2015

Home Appliance Mart Inc., Ann ArborBurmese American Initiative, Battle CreekProfessional Towing Services, LLC, Battle CreekMecosta County Red Arrow Amvets Post 1941, Big RapidsDavid R. Barroso DDS PC, BlanchardShamrock Lounge, BrightonRoaring 20’s Saloon, CadillacStephen’s Tire Service, CaroNancy Whiskey Pub, DearbornCliff Bells, DetroitSmitty’s Place, DimondaleAlcatraz, ErieStop Spot, FerndalePlaza Party Store, Grand LedgeFortino’s Party Store, Grand LedgeDerby Inc., Grand RapidsPrice Heneveld LLP, Grand RapidsWinter Blast 10K, Grand RapidsMIchigan Adventure Race, Grand RapidsWhoville 5K, Grand RapidsWolverine Resolution Run, Grand RapidsGround Hog Marathon, Grand RapidsYankee Springs Winter Challenge, Grand RapidsAngelo & Riccardo’s Inc., HesperiaPaul’s Silver Dollar Saloon Inc., Higgins LakeJ & J Foods Inc., HighlandHospice of Hillsdale County, HillsdaleCommunity Action House, HollandColleen Smith, HoltThe Rocket, Jackson

Continued from page 2

J & B Spot Inc., JohannesburgThe Cottage Gardens Inc., LansingIron Kettle, LewistonCaptain Chucks, LudingtonRiver St. Station, ManisteeCountry House Catering, MasonLittle Brown Jug, MaybeeAmerican Legion Berryhill Post 165, MidlandMidland Tire Company, MidlandBig T’s Road House & Sports Complex, MioThomas American Bar & Grill, MonroePioneer Quick Lubes Inc., Mount PleasantMurphy’s Nite Club, MuskegonTPWS Inc., MuskegonUniversal Wholesale Plumbing Retail Supply Co., Oak ParkSafari Circuits Inc., OtsegoRainbow Bar, OwossoBlue Water Center for Independent Living, Port HuronO’Tees Bar & Grill, RomulusRothbury Tavern, RothburyShoreline Pharmacy, South Haven39099 Van Dyke Road LLC, Sterling HeightsJan’s Bar, Swartz CreekTawas Lanes LLC, Tawas CitySunshine Care Home LLC, Three RiversWorld Magnetics ACQ Company LLC, Traverse CityGibbs Dental Lab LLC, Twin LakeHilltop Recreation Inc., VassarSunrise Print Communications, West BranchPioneer Resource Co LLC, WhittemoreJohnny on the Spot, Wixom

The three lawmakers who spon-sored the Main Street Fairness bills and helped maneuver them through the long and difficult legislative pro-cess were all named MRA’s Legislator of the Year for 2014.

They are: Sen. Jim Anan-ich (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

lawmakers stood out because of their leadership and hard work from begin-ning 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 Legisla-tive Committee in selecting the award recipients.

Sen. Jim AnanichAnanich 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 elec-tion 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 intro-duction. During the year-end lame-duck session, he was instru-mental in gathering support for the bills from Democratic caucus members in both chambers and helped make the argument to in-clude the bills as part of the roads plan. In the end, it was his bills that were adopted during the final, marathon night.

‘Main Street’ sponsorsare ‘Legislator of Year’

Rep. Eileen KowallKowall was first elected to the

House in 2008 and recently complet-ed her third and final term. She is

now an elected Oakland County com-missioner and may be interested in running for the Senate in 2018 when

her husband, Senator Mike Kowall, is term limited.

She was one o f the or ig i -nal sponsors i n 2 0 1 1 a n d sponsored the M a i n S t r e e t 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 al-ready owed by the consumer. As former part owner, with her hus-band, of Accurate Woodworking, Inc., she has experienced firsthand the impact of the state not requir-ing remote sellers to collect the 6 percent sales tax.

She was a key part of the 2014 suc-cess as she worked with her husband to get a hearing and a vote for the Sen-ate legislation in his committee. She and her staff spent countless hours working to perfect the language with the Department of Treasury and oth-er stakeholders.

Rep. Rob VerHeulenVerHeulen was first elected in

November 2012 to serve his Grand Rapids area district and was re-elect-ed 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 af-ter 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 Fair-ness play a role in the solution.

Great Northern Trading Co., Barb Stein, RockfordKaty’s Kards, Kim Sinicki, SaginawActive One Construction, Rocky & Michelle Bond, SalineProps, Beth Schulckbier, South HavenSouth Lyon Cycle & Sports Inc., Mark Childs, South LyonService Floor Covering, Bryan J Mazey, St. Clair ShoresMack-Alger Tire, William Spreder, St. Clair ShoresD & D Gunsmith Ltd., Dan Kurkowski, Troy

DTE Energy receives Buy Nearby award

Missouri retailer wins Lynch tripThe 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 anniver-sary. All retailers who held a Lynch Sale in 2014 were eligible for the prize.

Borr’s Bootery Inc., Roger A. Bergman, HollandLinn & Owen Jewelers, Stewart Powell, LansingAndrews Hooper & Pavlik, Jeff Fineis, OkemosDecors by Sandra Inc., Sandra Cluchey, PentwaterCountry Casuals, Rod Phillips, PetoskeyGenuine Toy Company LLC, Charles Dare, PlymouthDan & Chuck’s Kar Kare LLC, Dan Martyka, RedfordHerman’s Boy Inc., Floyd Havemeier, Rockford

Sen. Ananich Rep. Kowall Rep. VerHeulen

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

$50,000

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