December 18, 2014

While the dust continues to settle, the results of the November 2014 midterm elections will mean another dramatic power shift on Capitol Hill. Jewelers of America’ s legislative counsel, Haake & Associates, has compiled the following year-end roundup, which looks at the midterm election results and prospects for action during the current “lame-duck” session of Congress.

Midterm Elections

The elections resulted in an increased majority for Republicans in the U.S. House of Representatives and a Republican takeover in the Senate. With three races undecided in the House, the composition of the 114th Congress as of December 8, 2014, is as follows:
  • House: 244 Republicans, 188 Democrats (3 races undecided) (Net + 12 seat GOP pickup in the House as of December 8, 2014)
  • Senate: 54 Republicans, 44 Democrats, 2 Independents (both Independents caucus with the Democrats) (Net + 9 seat GOP pickup in the Senate as of December 8, 2014)

Jewelers of America Political Action Committee (JAPAC), the only PAC that represents the fine jewelry industry in D.C., had tremendous success during the 2013-2014 election cycle. Nearly 100% of the candidates JAPAC supported (15 House candidates and 4 out of 5 Senate candidates) won their elections, including key legislators such as House Judiciary Committee Chairman Bob Goodlatte (VA-6th), incoming House Ways and Means Committee Chairman Paul Ryan (WI-1st), the second-highest ranking Democrat in the Senate and a long-time sales tax fairness champion Senator Richard Durbin (IL), and incoming Senate Small Business and Entrepreneurship Committee Chairman Jim Risch (ID).

Lame-Duck Session Legislative Outlook

Sales Tax Fairness Legislation

Although retail industry champions of sales tax fairness legislation, including Jewelers of America, are waging a campaign to push Congress to pass sales tax fairness legislation before the end of the year, it appears the fight will continue into the 114th Congress. While Republican and Democratic supporters in the Senate are intent on bringing sales tax fairness legislation to the floor for consideration during the final weeks of the 113th Congress, members of House GOP leadership are intent on waiting to consider the legislation until Rep. Jason Chaffetz (UT-3rd) introduces his compromise bill, which will not likely occur until early 2015.

Tax Extenders Bill – 15-Year Leasehold Improvements Depreciation

On December 4, the House passed a “tax extenders” bill – a one-year extension of numerous tax breaks that expired at the end of 2013, including 15-year leasehold improvements depreciation. At present, the cost of improvements made to retail stores must be depreciated over 39 years. Jewelers of America has been a leader on this issue and has worked with Congress to have this critical tax provision extended and expanded several times since 2002. Senate Majority Leader Harry Reid has indicated that his chamber is focused on passing a federal government funding bill and may not take up the House-passed tax extenders bill before year’s end. Nevertheless, it appears Congress will pass a retroactive tax extenders package in early 2015 at latest.

Update: On December 16, the Senate passed a short-term tax extenders package, which includes a one-year, retroactive extension of 15-year leasehold improvements depreciation.  The provision will now expire on December 31, 2014.  The President is expected to sign the bill later this week. Given the short-term nature of the extension, JA will renew its efforts to fight for the provision in 2015.

Federal Government Funding Measure

To avert another federal government shutdown, Congress must pass a bill to fund the federal government before current federal government funding expires on December 11, 2014. In advance of that deadline, the House of Representatives is expected to consider a bill to fund the federal government through September 30, 2014. Although House GOP leadership will need the support of Democrats to pass the funding measure, it appears likely that the House will pass the bill and send it to the Senate. Senate Majority Leader Harry Reid has indicated that he would bring the measure to the floor for consideration, and Senators on both sides of the aisle have indicated that they would support the bill. So Congress is expected to send a year-long government funding measure to the President.

Help JA Take Action

Jewelers of America's unparalleled leadership in government affairs keeps jewelers’ interests front-and-center in the nation’s capital on federal and state legislative issues that matter to most to jewelry businesses. Help us take action in our Legislative Action Center.

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