Vander Linden Capitol Update – January 12, 2017
Wednesday, Feb. 11, 2015, at the Statehouse in Des Moines, Iowa. (submitted photo)
Des Moines, Iowa – The first week of the 2017 Legislative Session is coming to an end and we are focused on the budget. This session we are faced with a manageable budget shortfall and House Republicans are focused on living within our means. We hope to let Iowans keep more of their money, while simultaneously balancing the state’s budget. Below you will find some helpful information concerning some issues the legislature will address this session. Please contact me with any questions or concerns you may have.
The (Tax) Free Ride is Over—Amazon is Collecting
Iowa residents did not have to pay the state sales tax on their Amazon purchases until January 1, 2017. On the first of this year, Amazon started collecting the six percent state sales tax—but will not collect any local option taxes that might apply.
State Department of Revenue officials have stated that Amazon officials contacted them to notify the state that the retailer would begin to collect the tax in 2017. Amazon already collects sales tax for purchases made by residents in 29 states and the District of Columbia.
Iowa law currently only requires companies with a “nexus” in the state to collect sales tax for online purchases. Nexus means retailers with a brick-and-mortar presence like Target and Wal-Mart must collect sales tax on their online orders. Amazon does not currently have a physical presence in Iowa, so up until now, the burden has been on the customer to send the state an equivalent use tax (but very few do). The Iowa Department of Revenue has estimated that having Amazon collect sales tax could bring in between $18 million and $24 million in additional annual revenue.
So why is Amazon volunteering to collect the tax? This has actually been a trend around the country. Utah, Alabama, and D.C. are some other recent non-nexus collection states. Perhaps the retail giant is planning for a future distribution site (and thus nexus) in Iowa? Perhaps they anticipate a court decision that would require them to collect the tax regardless or nexus? Whatever the reason—Amazon purchases just became six percent more expensive in Iowa.
The Steps of Collective Bargaining
Public employees in Iowa have been given the right to unionize and collectively bargain for workplace rights since the 1970’s. Chapter 20, the section of Iowa Code that is dedicated to guiding the collective bargaining process, outlines steps for employers and unions to follow while trying to come to an agreement on the terms and conditions of a workplace contract. While Chapter 20 includes fine details of this process, it is important to take a birds-eye-view look at these steps before getting into the weeds on other specifics. The following is an overview of how the current collective bargaining process works under Chapter 20:
1) A representative from the Union and the Employer decide together on which topics they will be negotiating to include in the shared collective bargaining agreement. There are some topics which are mandated by law to be included, but anything extra must be agreed upon by both the union and the employer.
2) Once the categories have been decided, each party submits to the other their offer of benefit in each.
3) After reviewing each offer, the two parties sit down a second time and try to come to an agreement for each of the categories they had differing offers on.
4) If, after a good faith effort is put forth by both parties, an agreement cannot be met on certain categories, these topics—and only these topics—go to mediation.
5) A mediator is selected by the Public Employee Relations Board (PERB) through a process outlined by law. The mediator acts to assist both parties in coming to agreement on the categories in which they do not agree.
a. A mediator, however, may not compel the two parties to agree. If after mediation an agreement cannot be met on certain topics, they then go to arbitration – also known as binding arbitration.
6) An arbitrator is selected by PERB through a process outlined by law, similar to the mediator.
7) In arbitration, the arbitrator reviews only the offers on the topics that could not be agreed upon by both parties.
a. The arbitrator, unlike the mediator, may force the two parties into agreement on an offer.
8) The arbitrator will pick, for each topic, which party’s offer is the most reasonable, and will therefore be offered in the collective bargaining contract. This decision is considered final and cannot be contested by either party.
a. The arbitrator is bound by law to consider certain factors when reviewing these positions and deciding which will be selected as the final offer.
Chapter 20 goes into great detail about practices and procedures that must be followed in each category listed above. PERB is the neutral state agency that is tasked with administering these regulations. According to their website, PERB’s mission is “to promote harmonious and cooperative relationships between government and its employees without disruption of public services, via the expert and timely services of a neutral agency.”
Like the past six years, House Republicans will be looking at common sense ways to rebalance the current collective bargaining law so the relationship between management and labor is fair. The law is tipped in favor of government unions. Government-sector unions are empowered by the current collective bargaining law while management, representing the taxpayers in negotiations, is hindered by the same law from controlling costs.
