National Clothesline

The fates of several tax issues that could directly affect drycleaners in Virginia, West Virginia and Maryland are still up in the air, according to the MidAtlantic Association of Cleaners.

Some new taxes currently being considered by legislative leaders in Maryland include: health care premiums, payroll, increasing the sales tax and taxing profits on small businesses.

Of particular note is HB 84, Sales and Use Tax — Taxation of Luxury Services, filed by Delegate Justin Ross. The bill does not specifically mention drycleaning, but fur and clothing storage service are among the 41 items listed. MAC believes the bill to be “dangerous” and could lead to “significant tax increases.”

In other news, an estimated 84 percent of Maryland residents may soon pay a $2.50 “user fee” each month on their water bill. Gov. Robert Ehrlich has proposed the surcharge to raise $66 million a year to upgrade Maryland's 66 largest sewage treatment plants in an effort to curtail pollution in the Chesapeake Bay. The bill appears to have sufficient support for passage. If it is implemented, businesses would be charged $2.50 a month for each 250 gallons of daily sewage they produce.

One bill that MAC is “on-board with” in its present form is HB 294, also known as the Brownfields Redevelopment Reform Act, which seeks to allow specified applicants and properties to participate in the Voluntary Cleanup Program in the Maryland Department of the Environment. MAC also supports the legislation’s companion bill, SB 186.

Another potential problem for the state deals with unemployment insurance. As a result of larger payouts than tax receipts, Maryland employees are looking at a surcharge on their unemployment insurance tax payments in 2004. MAC noted that minimum rated employers could see their employee tax jump from $25.50 to $119 unless the Administration and General Assembly take steps to avoid such dramatic increases.

In West Virginia, Gov. Bob Wise has proposed new programs that seek to generate affordable basic health insurance coverage options for businesses that do not provide coverage at this time. Both the House Banking and Insurance Committee and the Senate are working on this proposal, as well.

Attention is also being given to the state’s workers’ compensation statutes, too. MAC expressed it would support a bill that opens the state’s worker’s compensation system to private insurers.

Meanwhile, in Virginia, there are three bills on the table that could expand sales tax to cover personal services, which certainly could affect cleaners. So far, Delegate Allen Louderback, Delegate Vivian Watts, and Senator Louise Lucas, have all endorsed bills that cover a wide scope in terms of personal service tax increases, changes, and reductions.

MAC Executive Director David Norford will continue to monitor legislative issues in all of the association’s member states in an effort to keep cleaners updated and informed. Even when some tax issues appear to be dead in the water, their status can change very quickl, he said..

In a recent issue of MidAtlantic Wired, Norford wrote: “Although MidAtlantic [Association of Cleaners] is part of a very large coalition of other businesses concerned with increased taxation, there is that possibility we could get snagged at the 11th hour in the waning moments of the General Assembly.”

For more information, contact MAC, (800) 235-8360 or visit online at www.macla.net.

As of mid-February, more than 30 companies had lined up to exhibit their products and services at the MidAtlantic Association of Cleaners†CleaningExpo Showcase and Auction March 13-14 at the Show Place Arena in Upper Marlboro, MD.

Three area trade associations are joining with MAC as co-sponsors of the exhibition. They include the Korean-American Drycleaners Association of Greater Washington; the Korean-American Drycleaners Association of Maryland; and the West Virginia Drycleaners and Launderers Association.

“The co-sponsorship of these associations will make a great show that much better by personally getting the word out across the entire region to that many more potential attendees,” said MAC President Gene Moorefield.

Show hours will be 10 a.m. to 6 p.m. both days with auctions scheduled for 3 p.m. The Show Place Arena is in the eastern suburbs of Washington, DC, about 7 miles from the Capital Beltway. Free parking will be available at the site.

Organizers believe the prospects for the show, which will be the first in the area in four years, are good. “CleaningExpo Showcase and Auction really comes at a good time, at a great location, with innovations in live event presentation,” said MAC President Gene Moorefield.

Competitive and environmental requirements from landlords and government make it essential that cleaners find ways to operate more efficiently and profitably, noted Buddy Gritz, the association’s treasurer.

“Finding new products and services is an important part of the mix,” he said. “With interest rates at an all time low and environmental loan funds, acquiring the latest environmentally sensitive technologies is easier than ever. It’s a time and opportunity not to be missed.”

MAC noted that its exhibit showcase is timely for another reason: the new Section 179 tax deduction which now allows small businesses to deduct a maximum of $100,000 up front for annual new capital equipment purchases made through 2005. The old limit was $25,000.

Additionally, the Internal Revenue Service announced that the first-year bonus depreciation deduction on certain capital assets has been increased from 30 percent to 50 percent for operating investments acquired and placed in service before January 1, 2005. The bonus depreciation applies to most equipment, machinery, and office furniture.

For more information on CleaningExpo Showcase, contact MAC, (800) 235-8360.

Exhibit space is now available for the Drycleaning & Laundry Expo 2004 to be held in Atlantic City, NJ, October 2 and 3. The popular exhibit will be held at the Atlantic City Convention Center.

Two years ago the show featured over 250 booths and attracted over 2,000 attendees, representing 1,600 plants.

A prospectus can be obtained from the sponsoring organization, the Pennsylvania and Delaware Cleaners Association. For information call 800/822-7352 or e-mail info@pdclean.org.