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Dear PEI Member: The prospects for the
first major federal income tax reform since 1986 are looking stronger, with
both houses of Congress soon to vote on comprehensive tax legislation and
President Trump pushing to have a bill ready for his signature by the end of
2017.
Most of the news headlines are about the possible
lowering of individual tax rates. The Senate and House bills, however,
contain many other provisions that would affect PEI members individually or
in their businesses. Here’s a summary of key elements in each bill:
- Inventory valuation. After an intensive
lobbying effort, the National Association of Wholesaler-Distributors (NAW),
an organization to which PEI belongs, scored a big win on this one.
Last-in-first-out (LIFO) accounting, a method that yields a higher cost of
goods sold and lower taxable income for many wholesale distributors,
survived in the Senate and House bills.
- Accelerated depreciation. Both bills propose
new rules that would allow businesses to speed up depreciation of capital
investments. In many cases, small businesses would be able to deduct 100%
of the cost of qualified property in the year of purchase. However, the
accelerated depreciation rules would expire after five years.
- Electric vehicle tax credits. Current law
grants purchasers of electric vehicles (EVs) a $7,500 federal income tax
credit. The House bill would eliminate the EV tax credit beginning in
2018. The Senate would preserve the credit as it now stands.
- Personal income tax rates. Both the House and
Senate bills lower some tax rates, especially in the middle income
brackets. Which bill you prefer will depend on your income. For example,
married taxpayers with income between $77,400 and $90,000 would see a 12%
marginal tax rate under the House bill, but 22.5% under the Senate
proposal. A couple with $90,000 to $120,000 of taxable income would pay
25% under the House plan, but only 22.5% under the Senate plan.
- Corporate income tax rates. Under present law,
corporate income is taxed at up to 35%. The House bill would lower that to
20% in 2018. The Senate bill adopts the same rate but would delay the rate
reduction until 2019.
- Pass-through taxation. Many PEI member
businesses are Subchapter S corporations or limited liability corporations
(LLCs). Business income from these entities passes through to the owners,
who then pay tax at their personal income tax rates, which can be as high
as 39.6%. The House bill would lower the maximum tax rate for pass-through
business income to 25%. The much more complicated Senate plan has a
maximum rate of 33%.
- Standard deduction. Roughly 90% of Americans do
not itemize deductions but instead take an IRS-allowed standard deduction.
The House and Senate plans would nearly double today’s standard
deduction—from $6,350 to $12,000 for single taxpayers and from $12,700 to
$24,000 for married couples.
- Popular deductions. For those who do itemize,
charitable contributions and mortgage interest deductions are preserved in
both bills; however, state and local income taxes no longer would be
deductible. The House would allow up to $10,000 in property tax
deductions, while the Senate eliminates this deduction altogether. The
deduction for student loan interest, retained in the Senate bill, is
eliminated in the House plan.
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Tax Reform Proposals
Visa Shifts Excessive Fraud Liability
Ozone Attainment Areas
PEI Convention Video and Audio Highlights
Latin America Committee Volunteers Sought
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VISA
SHIFTS LIABILITY FOR EXCESSIVE DISPENSER FRAUD
Effective Nov. 1, Visa began
shifting liability for excessive fraudulent transactions at automated fuel
dispensers (AFDs) to station operators. Under Visa’s program, retail fuel
marketers are deemed to have “excessive” fraud when they reach at least
$10,000 in monthly counterfeit AFD transactions and a fraud-to-sales rate of
at least 0.2 percent. Visa has been notifying retailers of their fraud
levels for the past several months so high-risk locations could improve
their performance before the liability shift.
Visa’s fraud
monitoring program will end Oct. 1, 2020, when all marketers that have not
converted to EMV-compliant equipment in the forecourt will assume liability
for fraudulent AFD transactions.
EPA
DESIGNATES OZONE ATTAINMENT AREAS
On Nov. 6, the U.S. Environmental
Protection Agency (EPA)
designated roughly 85 percent of the nation’s 3,100 counties as being in
compliance with a 2015 regulation that reduces the allowable amount of
ground-level atmospheric ozone from 75 to 70 parts per billion. The EPA is
continuing to evaluate the remaining counties to determine which are not in
compliance with the 2015 ozone limits.
States that
are determined to contain nonattainment areas will be required to submit
state implementation plans (SIPs) detailing the pollution control measures
they will use to meet the new ozone standards.
Additional
vapor recovery requirements relating to gasoline dispensing facilities (GDFs)
are unlikely. Under the Clean Air Act, Stage II vapor recovery equipment was
required at GDFs in serious, severe and extreme ozone nonattainment areas
until the EPA determined that vehicle onboard vapor recovery (ORVR)
equipment was in "widespread use." In 2012, the EPA officially made that
determination, noting in a related
fact sheet that ORVR and Stage II vapor recovery systems are redundant.
VIDEO AND
AUDIO HIGHLIGHTS FROM THE PEI CONVENTION
During the membership meeting at
the PEI Convention, your TulsaLetter editor presented the annual
State of the Industry report. Based partly on data from a recent survey of
PEI members, the address discussed current business conditions, the outlook
for distributors and manufacturers over the next few years and the big
issues and opportunities that are on PEI’s radar. A video of the 18-minute
presentation can be viewed
here on PEI’s YouTube channel.
In Chicago,
NACS also interviewed 2017 PEI President Craig Hoyer, 2018 PEI President
Robert Peavey and me for a “Convenience Matters” podcast called “Dispensing
Advice with PEI Leaders.” The complete conversation is now available on the
Convenience Matters website. You can subscribe to all Convenience
Matters podcasts through iTunes, Google Play or Stitcher.
PEI SEEKS
LATIN AMERICA STEERING COMMITTEE VOLUNTEERS
At the 2017 PEI Convention, 92
Latin American members attended a special educational session conducted in
Spanish. The annual membership meeting and a session on confined spaces also
were translated into Spanish. These very successful programs were the fruit
of a steering committee that met earlier this year to recommend ways in
which PEI could better serve members in Latin America.
The PEI
board of directors now has asked the steering committee to present
recommendations for additional Latin America programs and services PEI
should provide. To assist in this next phase, PEI is seeking to broaden and
expand the steering committee. The committee will conduct much of its work
via email, with a single face-to-face meeting in January 2018. To learn more
or volunteer to serve on the committee, email PEI Marketing Director Whitney
Emerick at
wemerick@pei.org by Friday, Nov. 30.
PEI
MEMBER NEWS
Husky Corp. celebrated its 70th anniversary on
Nov. 3 with an open house for suppliers, distributors and friends. Based in
Pacific, Missouri, Husky was founded by Eugene Sutcliffe and is today led by
his son, Grenville Sutcliffe.
Continental ContiTech acquired manufacturer Custom Machining
Services, Inc. Founded in 1979, Continental ContiTech has produced hose
assembly equipment, crimpers and dies at its Valparaiso, Indiana facility
since 1984.
APPOINTMENTS
Angie Daniels was named vice president of human
resources for Seneca Companies. Daniels has 20 years of human
resources experience in manufacturing at both corporate and plant levels.
Patrick Eakins joined Dixon Pumps as business development
manager for cleaning and filtration systems. Eakins has extensive experience
managing tank and fuel quality maintenance programs, as well as mobile fuel
and tank cleaning programs.
Power Integrity Corp. appointed P&G Marketing its
manufacturer’s representative for the petroleum market in Kansas, Nebraska,
Missouri, Iowa, Illinois and Wisconsin.
Universal Valve Co. appointed TR2 Corp. its exclusive sales
representative in Maryland, Delaware, Pennsylvania, Connecticut, Rhode
Island, Massachusetts, New Hampshire, Vermont, Maine and New York.
DEATHS
William A. Cartwright, 95, of Fort Wayne, Indiana, died Friday, Oct. 20.
Cartwright spent 42 years in the petroleum equipment industry, including
service at Bowser Inc., Wayne Pump and Tokheim Inc. He retired in 1990 as
vice president of marketing at Tronitec Inc. Survivors include three
daughters: Mary Lynn Muntz and her husband, Gary; Jenny Dougal and her
husband, Jim; and Julia Shadwick and her husband, David; and three
stepchildren, Nancy, Lynda and Roger.
Joe Kubasky, 60, of Cleveland, Ohio, died Oct. 7 after battling a
terminal illness. At the time of his death, Kubasky had served as SSECO
Solutions’ warehouse supervisor for 40 years. Survivors include three
siblings: brother Edward and his wife, Peg; brother Kenneth and his wife,
Sandy; and a sister, Lynn Oslin.
BRIEFLY
NOTED
“President Donald Trump's pick to fill EPA's second-highest post [Andrew
Wheeler] promised Wednesday that he will, if
confirmed, issue a finding on whether the agency believes it has the
authority to grant E15 and other higher ethanol blends a Reid Vapor Pressure
(RVP) waiver. … The lack of an RVP waiver prevents the sale of E15 in large
parts of the country from June 1 through Sept. 15, the peak of the
high-demand summer driving season.”—Oil Express News Alert, Nov. 8,
2017
“The Bureau of Economic Analysis reported that the U.S. economy grew by
an annualized 3.0 percent in the third quarter, extending the 3.1
percent gain in the second quarter. This was slightly better than the
predicted growth rate of 2.6 percent—a sign that even with the recent
hurricanes, the U.S. economy continues to expand at a decent clip.”—Monday
Economic Report, Oct. 30, 2017
“With more and more 3D printed parts hitting the market, Forbes
predicts the spare-parts supply chain will shift toward 3D printing
solutions within the next three years. A survey report from Strategy&
estimates that 85% of spare-parts suppliers will build 3D printing into
their strategies within five years… .”—Machine Design, Oct. 25, 2017
MEMBERSHIP APPLICATIONS
Taiwan car wash manufacturer. Chia-Ma Car Wash
Systems, No. 46-1 Alley 105 Sec. 2, Beigon Road, Taibao City, Chaiyi County,
Taiwan 61257, has applied for affiliate division membership. Ching Han Yang
is the international business manager for the firm, which was established in
1995. The company produces several types of car wash systems. Sponsored for
PEI membership by Tedmund Tiberi, AridTech, Wheaton, Illinois.
www.cmcarwash.com
California environmental construction company. Alaniz Associates
Corp., 21334 E. Cloverton St., Covina, CA 91724, has applied for service and
construction division membership. Manuel Christopher Pestana is president of
the firm, which was established in 2011. The company does UST and AST
installation, removal and repairs and offers water and soil treatment.
Sponsored for PEI membership by Don Petroni, PtrMktgEqp, Placentia,
California.
www.alanizassociates.com
Tennessee contractor. Service Bay Solutions, 405 Erin Drive,
Knoxville, TN 37919, has applied for service and construction division
membership. James Caldwell is project manager for the firm, which was
established in 2014. The company is a general contractor that installs and
repairs lubrication equipment. Sponsored for PEI membership by Jim Norton,
Samson, Swannanoa, North Carolina.
www.servicebaysolutions.com
ADMITTED
TO PEI
- TrueNorth Steel, West Fargo, North Dakota (mfr)
- GROZ Engineering Tools Ltd., Wood Dale, Illinois (aff)
- Sein Maung Engineering Co. Ltd., Yadanar Road, Myanmar
(S&C)
- Hellenic Technical Enterprises Ltd., Larnaca, Cyprus
(S&C)
- Quar Construtora S.A. de C.V., Miguel Hidalgo, Mexico
(S&C)
- Webb Environmental LLC, Westminster, Maryland (S&C)
- Tank Wizards Inc., Palm Bay, Florida (S&C)
- Matthew J. Cutshall, Sheetz, Altoona, Pennsylvania
(O&E)
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