November 10, 2016
While the dust settles on the results of the 2016 Presidential and Congressional elections, Jewelers of America has prepared a summary of the big changes on Capitol Hill and what they mean for key legislative issues that affect jewelry businesses.
Jewelers of America’s legislative counsel, Haake Fetzer, headquartered in Washington, D.C., kept a close eye on the historic 2016 elections for Congress and the White House, which were harder to predict than expected. The race saw enough twists and turns in the last few weeks and days to give even the most seasoned prognosticators whiplash. Here’s their breakdown of the results and what it means for legislation that could affect jewelry business:

Donald Trump Elected 45th U.S. President

Despite trailing in the majority of polls leading up to the election, Republican Donald Trump overcame the predictions to win the electoral vote and become the 45th President of the United States.

Of the races already called in 11 key battleground states, Trump won 6 (Florida, Iowa, North Carolina, Ohio, Pennsylvania and Wisconsin) while Hillary Clinton prevailed in 3 (Colorado, Nevada and Virginia). As of November 9, New Hampshire and Michigan were still too close to call. 

JAPAC Success in Congress

Riding on Trump’s victory, Republicans were able to hold off a challenge from Democrats, retaining the majority in the Senate they’ve held since 2014. Republicans also retained control of the House, with Democrats unable to capture the net gain of 30 seats needed to take the majority.

The good news for jewelers is that many of the candidates supported by the Jewelers of America Political Action Committee (JAPAC) won their elections: 17 out of 18 House candidates and 7 Senate candidates. JAPAC is the only PAC that represents the fine jewelry industry in D.C., so success for JAPAC is success for jewelers.

With one race undecided in the Senate and four undecided in the House, the composition of the 115th Congress as of November 9, 2016, is as follows:
  • Senate: 51 Republicans, 46 Democrats, 2 Independents (Independents caucus with the Democrats) (1 race undecided)
  • House: 239 Republicans, 192 Democrats (4 races undecided)

What This Means for Legislation & Regulation

With Republican control of the executive and legislative branches, it is very likely that Congress and the administration will work together to explore major tax reform proposals during the next Congress, in addition to repealing the Affordable Care Act and the Dodd–Frank Wall Street Reform and Consumer Protection Act. Here are Haake Fetzer’s insights into specific legislation that Jewelers of America is watching on behalf of its members:

Sales Tax Fairness

While momentum for sales tax fairness legislation continues to build on Capitol Hill – the bill could even be considered by the Senate during the lame duck session – we expect the fight for passage to continue into 2017. The legislation would help remove the tax advantage that some online retailers have over traditional brick-and-mortar businesses. States would have the option to require the collection of sales and use taxes already owed under state law by out-of-state businesses, rather than rely on consumers to remit those taxes to the states.

The measure has consistently had bipartisan support, especially in the Senate, where long-time Republican champions of sales tax fairness remain in office. Therefore, we do not expect the new makeup of the Senate to have a major impact on introduction of new bills or eventual passage. The bigger fight will be in the House where, despite bipartisan support, a sales tax fairness bill has not made it through the crucial Judiciary Committee for a vote on the floor.

Last-In, First-Out Accounting Method

Repeal of LIFO would deal a potentially fatal blow to companies in the jewelry industry that use the long-standing method of accounting for inventory. Lawmakers on both sides of the aisle have looked to it as a very favorable revenue raising option. LIFO is safe for now, but as the new administration and congress explore tax reform and other potential budget and entitlement reform options, pressure to repeal LIFO will remain.

Help Jewelers of America Affect Change

You help us keep jewelers’ interests front-and-center in the nation’s capital on federal and state legislative issues. Follow these issues and help us take action in our Legislative Action Center.
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