QUOTE OF THE DAY

Crains Chicago: Will online retailers be required to collect sales tax?

Online retailers soon could lose one of their biggest selling points: no sales taxes.

An intense fight is brewing over a new, more politically savvy version of federal legislation that would force all but the smallest online retailers to collect state sales taxes nationwide.

It's an especially big deal for Illinois: The cash-strapped state loses an estimated $212 million a year from online purchases by its residents and businesses. And the state's efforts to collect the tax had the unintended effect of driving thousands of small Web-based businesses out of state after big Internet retailers pulled their advertising campaigns to avoid having to collect sales tax on purchases made in Illinois.

Traditional retailers here and elsewhere such as Sears Holdings Corp. of Hoffman Estates and Glenview-based Abt Electronics have been fighting for years to get Congress to reverse a Supreme Court decision that said retailers don't have to collect sales taxes in states where they don't have a physical presence.

“It's early in the legislative year, but I think we're finally at the tipping point where this can become law,” says David Blum, a tax partner at Chicago law firm Levenfeld Pearlstein LLC, who represents both online and brick-and-mortar retailers. “The legislation has come a long way to be more palatable.”

Amazon.com Inc., the largest online retailer, supports the bill, but the company increasingly is subject to state taxes where it builds distribution centers to speed delivery.

WSJ: Snapshot of the American Taxpayer

Kearney Hub: Nebraska schools may cut hours to avoid health law

A lawyer for Nebraska public school districts said districts are considering cutting thousands of part-time non-teacher employees' hours next year to avoid offering them health insurance benefits mandated by the Affordable Health Care Act.

The act requires large employers - those with at least 50 full-time equivalent workers - to cover at least 60 percent of health care costs for employees who works more than 30 hours per week, putting some businesses and government agencies in a difficult position.

Karen Haase, a lawyer who represents about 150 school districts throughout Nebraska, said thousands of non-teaching employees - including teacher aides, bus drivers, custodians, cooks and clerical staff - could be offered extended health benefits, have their hours cut or be laid off. With tight budgets, Haase said she doubts many districts will offer benefits to part-time staff working more than 30 hours.

Some smaller school districts may lay off employees to remain under the 50 full-time equivalent workers cut off, and others plan to not hire additional staff to remain under the threshold, Haase said.

Haase said one Omaha-area district could reduce hours for 108 part-time teacher aides, but she wouldn't name the district.

School districts in larger cities seem to be focused on cutting hours, while many smaller school districts are considering risking the penalty for not offering benefits because they don't have enough staff to reassign duties, Haase said.

"I think quite a few employees will have their hours cut, but school operations will look the same when you walk in the door," she said.

Larger employers that don't offer affordable health insurance could be fined $3,000 per employee annually if the employee opts to receive a tax credit to purchase health coverage in an insurance exchange and the costs of the premium exceed 9.5 percent of the employees' household income, said Larry Levitt a health care expert with the Kaiser Family Foundation.

Risking the penalty is an option for districts because there's a good chance the employee won't opt to receive a tax credit to buy health insurance in an exchange, Haase said. And paying the tax penalty is cheaper than offering health insurance benefits, she said.

Hot Air: “The minimum wage for the self-employed is $0.00″

Still, an increase in minimum wages from $6.15 to $9.50 is a large increase.  By my estimate that total effect reduces teen employment by approximately 5.5%.  Other estimates could place that anywhere between 3% and 16%.  Some of this has already happened with the rising federal minimum wage.  This effect was not nearly as large as the unemployment of teens due to the Great Recession (teen employment fell from 165,000 in 2005 to 108,000 in 2009) but the rise in the minimum wage did not help.

In Minnesota 93,000 workers made the minimum wage in 2011.  32,000 of them are teenagers, of which 29,000 work part-time.  The number of workers who work at the minimum wage full-time and are over age 24 is only 18,000 of that number (there are almost 2.5 million workers in Minnesota.)  According to a 2007 CBO study, workers below 200% of the family poverty guidelines receiving higher wages due to a minimum wage increase only received 44% of the total rise in wages; the rest went to those above 200% of the family poverty guidelines.

A decline in employment, if true, is a serious issue for those with low skills.  Teens, particularly those from difficult circumstances, must find ways to signal employers that they have the skills needed to hold jobs.  Often those involve little more than courtesy, punctuality, the ability to make change, to work with others, etc.  Teens take low wages to gain that opportunity, and they are frustrated by higher minimum wages.  The employer will be less likely to “take a chance” on a young person, the higher the wage that must be paid.  That loss of experience may lead to lower wages throughout the rest of that teen’s life.

Moreover, the wage is only one feature of an employment contract.  Stricter discipline is possible on almost any job that makes it less enjoyable for the employee.  So too could work conditions change, such as fewer coffee breaks, less heating and air-conditioning, buying your own uniform, fewer vacations and fringe benefits.  Employers will seek workers who are willing to tolerate worse working conditions.  Competition still pushes the value of the job down, even when that is not expressed by wages.  Workers who do not want these worse conditions either must find work in industries uncovered by the minimum wage or work for themselves.

The minimum wage for the self-employed is $0.00.

New York Post: Mayor Bloomberg wants to extend soda ban across the state

Mayor Bloomberg today called on the state to follow the city's lead by banning the sale of sugary sodas in sizes larger than 16 ounces in all stores, not just restaurants.

The city's new law takes effect March 12 in food establishments regulated by the Health Department.

Supermarkets, groceries and shops where prepared foods constitute less than 50 percent of sales are not affected because they're overseen by the state Agriculture Department and the city doesn't have jurisdiction.

Individual pizza parlors would have to obey the new law, even when it comes to deliveries.

At a press conference today, the mayor was asked why pizza shops shouldn't be in the same category as supermarkets, where customers would still be able to walk out with all the two-liter soda bottles they could carry.

"You have exactly the right question, but you're asking it the wrong way," the mayor said.

"Keep in mind we're trying to save the lives of these kids, particularly kids...The state should do exactly the same thing in stores."

Gov. Cuomo's office said it was preparing a response.

Investor's Business Daily: ObamaCare's Taxes Kick In Before Care, Snare Middle Class

When the subsidized exchanges open in 2014, ObamaCare will become a redistribution program. This year, it's primarily a tax collection program.

The health law will shrink the fiscal 2013 deficit by $34 billion due to $36 billion in revenue, the Congressional Budget Office predicts.

Thus, ObamaCare's ramp-up will be an economic drag, made steeper by employers' shifts to avoid fines that kick in next year.

While much of the new taxes will come from high earners, ObamaCare's tax net will be impossible to avoid for the middle class. Pretty much anyone who uses medical care will pay up, since fees on insur ance policies, prescription drugs and medical devices are sure to be passed along to consumers.

Likewise, tax penalties for employers who fail to offer affordable and comprehensive coverage would come at least partly out of wages for moderate earners.

In all, ObamaCare is expected to raise about $800 billion in revenue over 10 years, including penalties on individuals and firms for not complying with new mandates.

Nevada Appeal: California law would tax Nevada businesses

Sen. James Settelmeyer, R-Minden, is trying to sound the alarm about a new California law he says could impose that state's corporate income tax on thousands of Nevada businesses.

Proposition 39 was approved by California voters in November and restructures how multi-state businesses calculate the taxes they must pay on sales and services to California customers. It was billed as closing a loophole allowing multi-state businesses to avoid taxes by moving jobs out of California.

Reno Certified Public Accountant David Turner, a former member of Nevada's Tax Commission, said the old formula took into account not only the percentage of a company's sales in California but the percentage of payroll paid and property owned in that state.

The ballot question replaced formula with one that just calculates the percentage of a company's total taxable sales that occur in California, Turner said. The problem for Nevada businesses is that the Silver State doesn't have a business income tax. Therefore, none of its Nevada sales would be part of that calculation.

“If a manufacturer here sells his product in California, 100 percent of his sales could be taxable by California,” Turner said about the result.

Settelmeyer said the new system would hit thousands of Nevada businesses with higher California corporate income taxes and most of them don't even know it exists.

He quickly added that he isn't trying to protect his ranching business. Although he sells nearly all his cattle to operators in California, agricultural businesses were among the very few exempted from Proposition 39. The others are mining, financial institutions and telecommunications companies.

Turner said long-standing federal law provided a way for two states with income taxes to work out something so a business didn't get double taxed on income.

“Nevada doesn't qualify because Nevada doesn't have an income tax,” he said.

“Whichever side you're on, you're looking at a half-billion out of this state's economy,” Settelmeyer said.

He said it's a radical departure from existing law.

New York Times: As Governors Meet, White House Outlines Drop in Aid to States

In an effort to put pressure on Congressional Republicans, the White House warned on Sunday that automatic budget cuts scheduled to take effect this week would have a devastating impact on programs for people of all ages in every state.

Cabinet officers sounded the alarm on television talk shows, and their concerns resonated with state officials, who were in town for the winter meeting of the National Governors Association.

Daniel I. Werfel, the controller of President Obama’s budget office, held an unusual Sunday briefing to catalog the effects of the cuts state by state.

He and Jason Furman, the principal deputy director of the National Economic Council, said they were not exaggerating the damage that would be done.

In place of the across-the-board cuts, known as sequestration, Mr. Obama wants Congress to agree to what he calls a “balanced plan.” The plan includes cuts in selected domestic programs, savings in certain benefit programs and additional tax revenue collected from some corporations and high-income people.

The conflict is shaping up as a real-world test of the importance and value of the federal government. Democrats expressed confidence that Americans would feel the impact of an $85 billion cut in a $3.5 trillion budget, while Republicans insisted that they would not accept new taxes on top of those signed into law by Mr. Obama last month.

Singularity Hub: A growing generation of housebound kids telecommuting to school with robots

Devon Carrow was born with eosinophilic esophagitis, an allergic inflammatory disease in which white blood cells build up in the esophagus that makes exposure to common foods such as peanuts, milk and eggs life-threatening. He also has anaphylactic shock syndrome, respiratory distress syndrome and asthma. The major risk of a deadly allergic reaction had prevented him from going to school with other children and forced Devon to be home schooled – that is, until VGo came along.
VGo is a telepresence robot developed by Nashua, NH-based VGo Communcations. Since January 2012 it has enabled Devon to attend Winchester Elementary School in West Seneca, NY. He communicates wirelessly with the robot from his home five miles away, navigating it down hallways and into classrooms.

At school Devon has the job of “greeter” where he greets fellow classmates at the school’s entrance in the morning. He speaks through VGo speakers, and the teacher speaks through a microphone and amplifier so that Devon can easily hear her. And when he needs to raise his hand a light on the robot is activated. VGo can run for an entire school day without needing to be recharged – more than can be said for some students I’m sure.

As Winchester Principal Kathleen Brachmann explains, it’s a world of difference between sitting at home alone with your books and being able to participate in classroom discussion or join your friends in the hallway for lockerside chats. “Walking down a hallway, seeing other kids,” she told the Washington Post, “you couldn’t expose somebody on a Skype session that way. It would just be like a TV screen. With this he really gets a feel, a sensation, of being there.”

Of course, getting around with VGo does have its extra work. Before it takes off down a hall, the Segway-looking robot lowers its camera to make sure the area in front of it is clear of objects and small people. It can sense large objects in its path and knows when it comes to a set of stairs. That’s when Devon has to wait for a teacher to lift his VGo. Luckily, the robot only weighs 18 pounds. But robots aren’t cheap. Generously, the school district is covering the $6,000 cost for VGo and the $100 per month service fees.

CARTOON OF THE DAY