November 9, 2018
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The results of the 2018 midterm Congressional elections are still coming in and Jewelers of America has prepared a summary of the major changes on Capitol Hill and what they could mean for key issues that affect jewelry businesses.

Jewelers of America’s legislative counsel, Haake & Associates, headquartered in Washington, D.C., kept a close eye on the 2018 elections to determine control of Congress. Timothy Haake has decades of experience with Capitol Hill and private sector legislative and regulatory policy. What follows is their breakdown of the results and what it means for legislation that could affect jewelry business.

The Results: Success for JAPAC

As of this writing, 15 candidates supported by the Jewelers of America Political Action Committee (JAPAC) won their elections in the House and Senate. This ensures that JAPAC, which is the only PAC that represents the fine jewelry industry in Washington, D.C., continues to have an impactful voice on Capitol Hill. The makeup of the new Congress could offer opportunities for bipartisan issues that Jewelers of America advocates for, like sales tax fairness, to gain ground.

House of Representatives

It was a partial “Blue Wave” as Democrats were able to win enough seats in the House to wrestle control from Republicans for the first time since 2010.
  • House: 225 Democrats, 197 Republicans (13 races undecided*)

Senate

Republicans retain the majority they’ve held since 2014 and gained several seats.
  • Senate: 51 Republicans, 44 Democrats, 2 Independents (Independents caucus with the Democrats) (3 races undecided*)

*Results as of November 9, 2018

What It Means for Jewelers' Issues

 

Sales Tax Fairness

Jewelers of America has fought for decades to level the playing field for our brick-and-mortar member retail stores. With the U.S. Supreme Court decision in June to overturn the 1992 Quill Corp. v. North Dakota case, we’ve won a victory to achieve this goal. However, we believe Congress may still need to act to create a federal framework for online sales tax collection.

Impact of New Congress
If Congress does need to step in, it could be in a better position to do so.
  • Rep. Bob Goodlatte (VA-6), Chair of the House Judiciary Committee, who staunchly opposed sales tax fairness is retiring, opening up the opportunity for new leadership. If new legislation is needed and introduced, this change could help clear a path for passage, which had previously stalled in the Committee despite having bipartisan support.
  • With Democrats taking over the House, Rep. Jerrold Nadler (NY-10), the highest ranking Democrat on the Committee and supporter of sales tax fairness, could take over as Chair.
  • The measure has consistently had bipartisan support 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 any new bills or eventual passage.

What's Next
  • For now, Jewelers of America and other proponents of sales tax fairness like the National Retail Federation are taking a “wait and see” approach as states implement legislation in the wake of the Quill decision.
  • Jewelers of America will continue to watch the issue closely and provide information and education to members (like our recent September webinar) on how they can best comply with the changing sales tax landscape with the Quill decision.

FTC: "Made in USA" designation

Under an existing Federal Trade Commission (FTC)standard related to "Made in USA," the point of origin of materials used in the manufacture of jewelry is the only consideration when determining whether or not that jewelry can use the “Made in USA” designation. We believe this is misguided and ignores the work and skilled labor of the U.S. jewelry workforce.

Jewelers of America continues to push for an update to the FTC's standards on this issue. During JAPAC’s D.C. Fly-In held in June, jewelers received positive reception from lawmakers on both sides of the aisle when discussing "Made in USA." More recently, Jewelers of America helped craft language included in a letter from the Senate Appropriations Committee to the FTC asking the Commission to clarify its position on the issue.

Impact of New Congress
  • If the FTC doesn’t address requested changes from the Senate Appropriations Committee, it and Congress could take steps to change the requirements. Given the issue has bipartisan support, we do not anticipate major changes in strategy with the incoming Congress, and JA will continue to push for changes to the current requirements.

Last-In, First-Out (LIFO) 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. Jewelers won a key victory in the fight to preserve LIFO last year, when repeal was kept out of tax reform.

Impact of New Congress
  • Lawmakers on both sides of the aisle could continue to see repeal of LIFO as a very favorable revenue-raising option as they look to reduce the deficit. LIFO is safe for now, but we continue to watch the issue closely as the political winds shift.

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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