We just completed our fourth week of the 2018 session. This week there were several issues heard within the committee that impact the retail industry. These issues include product bans and tax issues.
There were two product ban pieces of legislation heard this week which impact our members.
The first was Delegate Lopez’s HB 951 which would prohibit both the manufacture and sale of upholstered furniture intended for residential use or any product intended to come into contact a person younger than 12 if said products contain certain flame-retardant chemicals. This ban was very broad and would impact many of our members. We have seen this legislation in past years and continued our position of opposition this year. This bill was defeated in sub-committee by a vote of 4 to 3.
BLOCKING INTERNET ACCESS
In addition to this, Delegate LaRock introduced HB 1592 which would prohibit the distribution or sale of any product that can access the internet, unless such product contained a content blocking system which rendered obscene content inaccessible. This bill would have a huge impact on our members if it were to pass. It would open up our members to potential liability for selling a product that does not contain the content blocking system. VRF opposed this legislation because of the negative impact it would have on retailers. The bill failed to pass out of House Courts Subcommittee #2 due to lack of a motion by the committee members.
In addition to product ban legislation, we also heard several bills on the topic of taxes.
The first was Delegate Davis HB 966 which would eliminate the BPOL tax, eliminate the grocery tax, and eliminate the bottom two income tax brackets by imposing a tax on services. There are several exemptions to the tax on services including business to business exemptions. Some of our you may remember this concept from the Thomas Jefferson Institute study that was done several years ago. VRF supported the concept of this legislation because of its efforts to eliminate the BPOL tax. The legislation was carried over to 2019, which will allow all interested parties time to work on this concept outside of General Assembly Session.
STREAMING SERVICES & PREPAID CALLING SERVICES
The second major tax issue that we heard this week was Delegate Watts HB 1051 which applied the Communications Sales and Use Tax, to streaming services and prepaid calling services. Among many things, this would possibly institute a double taxation on prepaid cell phones. VRF opposed this legislation due to the negative impact it would have on our members. The bill was passed by indefinitely by House Finance Committee by a vote of 22 to 0.
We are quickly approaching crossover, so the House and Senate will hold committee meetings which will meet for long hours to wrap up all the legislation which originated in their body. We will be working on several important issues, to the retail industry, over the next week and will keep you posted as to their status.