SEMA and 54 other trade associations asked Congress to limit the amount credit card companies can charge merchants when processing payments. Congress addressed some, but not all swipe fees when it enacted the new financial reform law.

Under the existing system, the merchant pays a transaction fee every time a card is used, whether for credit or debit. The “swipe” fees amounted to $63 billion in 2008. The fees can average 2%–4% for businesses that accept debit/credit cards and are automatically divided between the merchant’s bank, cardholder’s bank and network that processes the transactions.

As a result of the new financial reform law, the Federal Reserve now has the authority to ensure that debit card transaction fees are “reasonable and proportional to the actual cost incurred” when processing a transaction. However, the Federal Reserve’s power is limited to the fees charged or received by the issuing institution (bank). Credit card fees charged by a payment network (such as MasterCard or Visa) will be generally free from regulation.

Merchants are allowed to offer discounts for one form of payment over another (cash or check vs. debit or credit). Merchants are not free to favor one card network over another but can now choose which network to use to process their transactions (Pulse, STAR, etc.). This may spur more competition and lower transaction fees.

For further information, contact Stuart Gosswein at stuartg@sema.org.

SEMA and 54 other trade associations asked Congress to limit the amount credit card companies can charge merchants when processing payments. Congress addressed some, but not all swipe fees when it enacted the new financial reform law.

Under the existing system, the merchant pays a transaction fee every time a card is used, whether for credit or debit. The “swipe” fees amounted to $63 billion in 2008. The fees can average 2%–4% for businesses that accept debit/credit cards and are automatically divided between the merchant’s bank, cardholder’s bank and network that processes the transactions.

As a result of the new financial reform law, the Federal Reserve now has the authority to ensure that debit card transaction fees are “reasonable and proportional to the actual cost incurred” when processing a transaction. However, the Federal Reserve’s power is limited to the fees charged or received by the issuing institution (bank). Credit card fees charged by a payment network (such as MasterCard or Visa) will be generally free from regulation.

Merchants are allowed to offer discounts for one form of payment over another (cash or check vs. debit or credit). Merchants are not free to favor one card network over another but can now choose which network to use to process their transactions (Pulse, STAR, etc.). This may spur more competition and lower transaction fees.

For further information, contact Stuart Gosswein at stuartg@sema.org.

Beginning in 2012, businesses will be required to file “Form 1099” information returns with the Internal Revenue Service (IRS) and report all payments to corporations for goods or services in excess of $600. Under current law, most corporations are exempt from receiving 1099s. The 1099 reporting requirement is expected to raise $17 billion over 10 years. It was included as a revenue-raising initiative under the new health care law, in this case, collecting taxes on a potential source of unreported income.

SEMA-supported legislation has been introduced in Congress to repeal the requirement. Unless overturned, the rule threatens to impose enormous burdens on small businesses, certified public accountants and tax preparers as they attempt to track and report a wide range of payments to contractors, vendors and others. For example, companies would be required to report business-to-business payments for airline tickets, office supplies, phone and shipping services.

The IRS is seeking comments on how to best implement the law. The IRS has proposed to exempt purchases made with credit or debit cards since they are now reported by banks and other payment processors. However, it would not be a solution for businesses that pay by check or cash, or for vendors that do not accept credit/debit cards, in part, to avoid the 2% or 3% transaction fees. Additionally, if a vendor refuses to supply a tax ID number, then the payer could be required to withhold 28% of the vendor’s payment and send that amount to the IRS.

Comments about the IRS proposed rule are due by September 29. SEMA is working with a coalition of other associations to repeal the law.

For further information, contact Stuart Gosswein at stuartg@sema.org.

Beginning in 2012, businesses will be required to file “Form 1099” information returns with the Internal Revenue Service (IRS) and report all payments to corporations for goods or services in excess of $600. Under current law, most corporations are exempt from receiving 1099s. The 1099 reporting requirement is expected to raise $17 billion over 10 years. It was included as a revenue-raising initiative under the new health care law, in this case, collecting taxes on a potential source of unreported income.

SEMA-supported legislation has been introduced in Congress to repeal the requirement. Unless overturned, the rule threatens to impose enormous burdens on small businesses, certified public accountants and tax preparers as they attempt to track and report a wide range of payments to contractors, vendors and others. For example, companies would be required to report business-to-business payments for airline tickets, office supplies, phone and shipping services.

The IRS is seeking comments on how to best implement the law. The IRS has proposed to exempt purchases made with credit or debit cards since they are now reported by banks and other payment processors. However, it would not be a solution for businesses that pay by check or cash, or for vendors that do not accept credit/debit cards, in part, to avoid the 2% or 3% transaction fees. Additionally, if a vendor refuses to supply a tax ID number, then the payer could be required to withhold 28% of the vendor’s payment and send that amount to the IRS.

Comments about the IRS proposed rule are due by September 29. SEMA is working with a coalition of other associations to repeal the law.

For further information, contact Stuart Gosswein at stuartg@sema.org.

SEMA has been asked by the federal government if any companies would be interested in converting domestic vehicles for export to right-hand-drive countries. The U.S. General Services Administration (GSA) purchases about 90,000 vehicles a year for various government agencies, and a small number of those vehicles are exported for use in foreign countries.

The GSA is researching whether it would be cost-effective to convert left-hand domestic vehicles to right-hand drive. Potentially, 100–150 vehicles per year could be converted, such as Chevy Suburbans or similar SUVs (or large sedans).

If you are interested in more information, contact Stuart Gosswein at stuartg@sema.org.

SEMA has been asked by the federal government if any companies would be interested in converting domestic vehicles for export to right-hand-drive countries. The U.S. General Services Administration (GSA) purchases about 90,000 vehicles a year for various government agencies, and a small number of those vehicles are exported for use in foreign countries.

The GSA is researching whether it would be cost-effective to convert left-hand domestic vehicles to right-hand drive. Potentially, 100–150 vehicles per year could be converted, such as Chevy Suburbans or similar SUVs (or large sedans).

If you are interested in more information, contact Stuart Gosswein at stuartg@sema.org.

Barry Meguiar’s family has been in the car-care business for 109 years, and he’s personally headed up the company that carries the family name for more than four decades. As the president of Meguiar’s Inc., he’s seen the economic roller coaster trundle up and down many times before, but he’s never seen anything like the past couple of years. Despite the fact that his company not only weathered the storm but actually prospered, posting a double-digit gain in 2009 alone, he said that the recession has battered the car-care industry like none other in his lifetime. [Read more]

Barry Meguiar’s family has been in the car-care business for 109 years, and he’s personally headed up the company that carries the family name for more than four decades. As the president of Meguiar’s Inc., he’s seen the economic roller coaster trundle up and down many times before, but he’s never seen anything like the past couple of years. Despite the fact that his company not only weathered the storm but actually prospered, posting a double-digit gain in 2009 alone, he said that the recession has battered the car-care industry like none other in his lifetime. [Read more]

Barry Meguiar’s family has been in the car-care business for 109 years, and he’s personally headed up the company that carries the family name for more than four decades. As the president of Meguiar’s Inc., he’s seen the economic roller coaster trundle up and down many times before, but he’s never seen anything like the past couple of years. Despite the fact that his company not only weathered the storm but actually prospered, posting a double-digit gain in 2009 alone, he said that the recession has battered the car-care industry like none other in his lifetime. [Read more]

Barry Meguiar’s family has been in the car-care business for 109 years, and he’s personally headed up the company that carries the family name for more than four decades. As the president of Meguiar’s Inc., he’s seen the economic roller coaster trundle up and down many times before, but he’s never seen anything like the past couple of years. Despite the fact that his company not only weathered the storm but actually prospered, posting a double-digit gain in 2009 alone, he said that the recession has battered the car-care industry like none other in his lifetime. [Read more]