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WSWA monitors many federal issues that are important to our members and the industry. Take a look at the issues below for more information.
LIFO (Last in, First Out) is a generally-accepted accounting principle that has been extensively used by large and small companies since 1938. LIFO is used by companies to determine book income and tax liability. Under current U.S. law, the use of LIFO is required for book purposes if it is used to determine tax liability.
Virtually all WSWA members use the LIFO method. Repeal of LIFO would result in a massive retroactive tax bill going back three and four generations for some companies. In any comprehensive tax reform, it is imperative that American family-owned businesses continue to use LIFO in order to remain competitive job creators in their local communities.
WSWA represents over 400 family-owned wine and spirits distributors in 50 states and the District of Columbia. Estate tax uncertainty impacts the ability of a family business to be passed onto future generations. The current estate tax rate and exemption level expire on December 31, 2012. Under the temporary deal agreed to in early 2011, the rate of taxation is 35% and the exemption level is $5 million per individual. Without Congressional action, the estate tax rate will be 55% and exemption level $1 million.
WSWA is committed to a full repeal of the estate tax. However, we recognize that in the current environment, a permanent estate tax solution would be beneficial for all family-owned businesses in order to ensure an orderly transition from one generation to the next.
As part of his annual budget submission to Congress, President Obama included a provision that would force most pass through entities – S corporations, partnerships, limited liability corporations, etc. – to become C corporations. If enacted, this policy change would result in double and increased tax rates for current flow through organizations. Without Congressional action, the highest tax rate for flow through businesses will rise from 35% to almost 45% in 2013. In addition to this rate increase, flow businesses that become C corporations will also be subject to corporate rates, in addition to the individual rates these entities currently pay.
WSWA believes that any tax reform legislation must take into account S Corporations, partnerships, limited liability corporations, and sole proprietorships as well as C corporation rates. Arbitrarily forcing flow-through businesses to become C Corporations will result in significant tax increases for American family-owned business.
Click here for more information on Wholesaler tax issues.
While there have been significant decreased in the number of alcohol-related accidents, fatalities and injuries in the past twenty years, WSWA remains steadfast in its commitment to fighting drunk driving. Ignition interlocks are an important new technology that will help combat drunk driving.
WSWA supports legislation requires an ignition interlock on any vehicle of any person convicted of a repeat DUI offense or any first time offender whose blood alcohol content (BAC) was over .15. Interlocks need to be part of a comprehensive anti-DUI strategy. There is no silver bullet to solving the problem. This policy ensures that interlocks are mandated for those who pose the greatest threat to public safety.
As Congress seeks to make the United States Postal Service (USPS) solvent, it is imperative that individual state laws concerning the direct to consumer shipping of wine, beer and spirits are respected. The 21st Amendment gives states the primary authority to regulate the sale and distribution of beverage alcohol. While House postal reform legislation does not have any language that would affect the alcohol industry, the Senate bill (S. 1789) would permit the USPS to deliver beer and wine provided the laws of both where the product originates and where the product is be shipped are abided.
WSWA is adamantly opposed to permitting direct shipment to retailers via the USPS or any other common carrier.
WSWA strongly supports maintaining the Alcohol and Tobacco Tax and Trade Bureau (TTB) as an independent agency within the Department of Treasury. The Office of Management and Budget (OMB) has proposed dissolving the TTB by giving the revenue functions to the Internal Revenue Service (IRS) and moving the public protection functions to the Food and Drug Administration.
While the TTB’s budget remains largely intact, there is language in the Obama 2013budget (Appendix 1119, Section 125) that would give the commissioner of the IRS sole discretion to conduct excise tax violation investigations and enforcement actions. This infringement on TTB’s Congressionally-mandated authority is opposed by all members of the beverage alcohol industry – wineries, distillers, brewers and distributors.