Chamber Members Voice Business Legislative Issues

Chamber members discuss top business issues for the
2013 legislative session with
Jennifer Byers, MN Chamber of Commerce.

Numerous OACCT members, and other business leaders from the region, gathered to share input on business issues the Minnesota Chamber should focus on for the 2013 session.

Among the top issues: taxes and tax reform (business should be apart of the discussion); workforce issues (specifically soft/critical skill development); energy costs (less government involvement); healthcare; prevailing wage and the state departments managing details of the legislative action that is unclear and not consistent, which makes it difficult for businesses to comply.

Jennifer Byer is the vice president of grassroots and local chamber relations for the Minnesota Chamber of Commerce (jbyers@mnchamber.com).

Elected Officials Working on Sales Tax & Use Audit Issue

Letter from Representative Kath to Commissioner Frans asking
 about small business struggles with Sales Tax & Use  Audits

Recent responses from both Senator Parry and Representative Kath regarding struggles OACCT members are encountering with the MN Dept. of Revenue on Sales Tax & Use Audits are encouraging that we're being heard.

The OACCT waits anxiously to hear a response from the Dept. of Revenue or our elected officials.

Below are a couple of examples of how the sales tax and use audits effect us locally:


An example is an anonymous OACCT member sharing their experience as a local business accountant.
“…the big concern was the number of auditors the state had hired and the "return on investment" these new auditors were required to earn.  It seemed the state was putting more pressure on short term returns, for budget reasons, than long term compliance.  This put pressure on the auditors and their attitudes changed to a more aggressive and less forgiving attitude.”  

Another OACCT member, Ag Power Enterprises, recently went through this audit and felt confident to identify themselves and share their experience.
“The audit lacked a plan.  The auditor did not start by attempting to get an understanding of our business.  That ultimately resulted in him missing huge segments of the business transactions.  His sampling techniques were random.  The documentation said he wanted to look at changed several times over the audit, so his effectiveness at uncovering problems was poor.


There seemed to be several good learning opportunities but he just dropped them.  The audit report at the end of the audit was strictly a justification for applying our percentage of shortage from one or two months to the entire 27 month audit period.  There should have been a narrative report that articulated our shortcomings so that we have a plan of improvement.  That seems like a missed opportunity and points to a more punitive posture than a teaching posture. 


We are pretty good at complying with sales tax rules at Ag Power, but even so, there are several complexities that have tripped us up.  There should be a process of giving a warning about an issue and then going back for a second audit that checks to see if the needed corrections have been made.  From my CPA experience, I would say that that process should especially be available for very small businesses.  Small business owners are jacks-of-all-trades and can easily miss sales tax rules.


Taxpayers deserve more professionalism and business friendly procedures out of the Department of Revenue.”
-David Allard, controller, Ag Power Enterprises

City Council Notes-May 1, 2012

A part of the OACCT's Public Policy efforts for 2012 is for volunteers from the Public Policy committee attend both City and County meetings and report back on items that are of interest/concern to business.

The council meeting was mostly a report from Fire Chief Mike Johnson on how the department is running.  He stated that the efficiencies of the department has reduced the rate amount for home owners insurance.

Next major item was the rental agreement between Spectrum Pilot Services and airport to provide flight instruction and plane rental services.  The agreement states that Spectrum would pay $75.00 per month to rent office space and allow Spectrum hanger space when needed.  This is a one year lease and will re-evaluate this after the first year.

The balance of the meeting was spent on re-appointments to city boards and commissions recommendations.

12 County Partnership-Human Services

Proposed business model of
12 county/regional service distribution

OACCT members gathered to hear a draft proposal designed from 12 southeastern counties (organized by Accenture, hired with funds from the Bush Foundation) on delivering human services in a regional venue. These counties are leading a collaborative, cost-savings and cost-effective effort-the first of it's kind in Minnesota.

The newly conceptualized business model shows if services are combined to meet the demographic need an estimated $25-$40 million (10-15%) savings over a five year period could be realized per county and an estimated $50+ million total savings realized by federal, state and counties (combined) over a five year period.

Estimated savings if 12 county business model was implemented

Next steps include answering questions of governance (i.e. 1 county, 1 vote on the regional board), funding (where/how is money dispersed), locations of high touch services, and pay plan.

An upcoming meeting with all counties will determine if this conceptional model will push forward into reality.

Steele County Administrator Shea is supportive of the concept, but still wants to see "the devil in the details" ironed out before fully committing.

Is Your Business Being Treated Fairly When It Comes to Sales Tax?

Brad Meier, president/CEO
OACCT

Do you think it’s fair that an online retailer can sell the same product sitting in your store and not pay sales tax?  We don’t.

Internet sales have grown at a phenomenal rate and represent nearly 10% of all retail purchases.  Because a U.S. Supreme Court decision (before e-commerce existed), online-only retailers are not collecting sales tax from consumers at the point of sale

This deeply flawed and outdated system hurts small businesses that collect sales tax as required by law. This unfair tax advantage leads to less commerce at brick-and-mortar retailers that contribute to our state and communities.

There is a legislative ‘fix’ that could come at the end of the session.  We are advocating for e-fairness and requiring on-line retailers remit the same sales tax as our bricks and mortar retailers.

Highway 14-Will it ever become a four lane highway?

The MN Department of Transportation (MNDOT) is giving us enough red flags about the four lane completion of Highway 14 from Owatonna to Dodge Center that we are concerned it won’t be in their upcoming 20 year plan (to be released near the end of the year).

Can we count on State Funding for Highway 14 completion?
At a recent meeting in St. Paul where the MNDOT Commissioner Tom Sorel presented the departments vision for the future, it was clear they are planning to save the major road investments for congestion projects. They have strongly suggested they are not going to include the four-lane expansion of Highway 14 in this new plan.

They have also suggested highway expansion remains an option to address rush hour congestion.  This contradiction will lead to an unacceptable outcome for southern Minnesota.

Highway 14 remains one of the most dangerous rural roads in Minnesota.  Projected population and traffic growth along the corridor will only make this highway more dangerous in the future.

Four-lane expansion is the only solution that will address safety, mobility and traffic growth along Highway 14.  Many cheaper alternatives have already been exhausted; more will only make the situation worse.

How can I Help get Highway 14 completed?
We are not sitting idle.  We recently sent an alert out to all chamber members asking you to send a pre-written message to the Governor and our state representatives urging their support for having Highway 14 in the 20 year plan.

This pressure needs to remain to strengthen the message that Highway 14 as a 2 lane is not acceptable.
The Legislature should not abdicate such an important decision like this to MnDOT alone.  The Legislature needs to assert its right to oversee MnDOT before any final decision is made.

School Position Future Proposals

Mike Milstead, Ag Power Enterprises
OACCT Board Chair

The Owatonna School District is important to local business success by educating the future workforce, attracting new employees, and creating our future leaders.  The Owatonna Area Chamber of Commerce & Tourism (OACCT) Board of Directors would like to suggest increased involvement by the business community in the strategic efforts of the school district.

Chamber members know the recent decision to cut school programming is a major decision that will impact the district and community in multiple ways.  We believe that a clear plan that results in a safe, productive, and challenging environment will continue to produce the quality student for which Owatonna has come to be known.  Not being directly connected to the development of these recent proposals leaves us unqualified to advocate a position either way on behalf of our members regarding the validity of the proposal or the course of action that should be taken to resolve the budget crisis.

Chamber members have acknowledged the importance of the district’s plans and are requesting the Chamber’s agenda include sharing business input on current and future school district proposals.

We welcome an opportunity to share business expertise with school district officials to assist in resolving the challenges facing the district.

Committee member Mike Milstead is one of the owners of Ag Power Enterprises, which is building a new location on 18th St. SW.  The building is scheduled for completion late spring/early summer.