NAMA Insight

July 22, 2014
Another rough year awaits us on the regulatory front

While the past few years have been especially challenging for our industry, a variety of proposals are being considered in state houses and on Capitol Hill, threatening the future of our members in a way we haven’t seen in quite some time.

NAMA will be working hard to fight these proposals and protect our interests, and looking back, there’s no question that we can be effective. Just last year, NAMA and its allies saved the industry $4.5 billion by stopping the federal sugar sweetened beverage tax, according to the Congressional Budget Office.

We also saved Florida vendors millions by stopping a potential tax on bottled water sold in vending machines, and helped save New York residents millions from a proposed tax on soft drinks, just to name a few of our recent victories.

New federal proposals threaten us

New rules being written by the Food and Drug Administration about how vending operators must label calories on all our snacks and drinks.

In addition, new regulations from the IRS will require your business to file a 1099 form for every person or company that you pay more than $600 per year. The regulation will require anyone who paid your company more than $600 to send you a 1099 as well.

Another proposal introduced in Congress eliminates most candy and many traditional snacks in schools. It is likely that next year, the Secretary of Agriculture will write regulations with nutritional standards for all vending food sales in public schools.

Health care law brings new costs

In the recently passed federal health care reform bill, our businesses and families will face unprecedented new regulations on everything dealing with health insurance. For example, your year-end W-2 form will list your health insurance as a benefit. If you have a flexible spending account for medical expenses, the annual contribution is reduced to $2,500, and you may not use it for over-the-counter medications.

Taxes are also going up due to the new federal health care reform legislation. There is a Medicare surtax. There is a new 40 percent excise tax on high-cost health insurance plans. And if you have more than 50 employees, penalties will be imposed if just one of your team members uses the state health insurance pool.

There are new proposals in almost every state and many cities that would raise taxes on vending companies. Even worse, the rate of the new tax can be astronomical. Just this year, Oklahoma raised taxes on vending machines 300 percent.

I could continue about the threats that our industry is facing. But you already know of the coming government red tape, changes in regulations and tax increases that are just around the corner. You hear about new proposals every day and understand the trouble on the horizon.

But while you may understand the trouble generally speaking, I’m not sure that everyone understands how the vending industry in particular is targeted. The truth is that our industry is being directly targeted by Congress and the Administration for the products we sell. They see our industry — and more specifically the profits you receive for all your hard work and dedication in particular — as an easy way for them to pay for their new programs.

Congress targets our industry

And if you don’t really think it’s that serious, consider this quote from Roll Call newspaper that shows how Congress decides who to tax:

"In what was estimated to be 82 hours of meetings among committee Democrats, the idea of a soda excise tax was seriously discussed, according to one Ways and Means staffer.

“We spent a lot of time on it,” the staffer said. “We talked about chocolate milk, lemonade, non-soda pop, fruit drinks, drinks with added sugar, potato chips. It’s a question of picking one thing from all those to tax.”

We need your help to stop this attack on our industry that translates into an attack on your bottom line, and we can’t do it alone. An effective government affairs program cannot be covered by membership dues alone.