HCN has nothing but happy memories of California.
It was here in 2007, under a sunny San Diego sky, that we recognized Augie Venezia and Fairfax Lumber as the 2007 Independent Pro Dealer of the Year.
We have followed Venezia’s subsequent career with keen interest, and have applauded his handling of regulatory storm clouds. This last one is a whopper.
Venezia is currently president of the board of the West Coast Lumber & Building Material Association (WCLBMA). Last month, he and colleagues were at a California Board of Equalization (BOE) hearing, representing the interests of lumberyards as the state bumbles through its implementation of a “lumber products assessment” — an additional 1% fee on retail sales of lumber.
A little background.
Well after midnight on the last day of the California legislature’s final session of 2012, and under the cloak of “emergency legislation,” the assessment was voted into law. And to pour salt in the wound: The law was made effective for the first day of 2013.
“There were no hearings, no opportunities for input, and the bill passed at 2:45 a.m., as the final action of the legislature,” wrote WCLBMA executive director Ken Dunham in an editorial for the California Taxpayers Association. “The bill has been described as one of the worst examples of legislative abuse in years.”
Now, how is the state going to collect? That’s been a bone of contention ever since. The state’s plan was to throw a little money at the lumber retailers so they can implement the necessary point-of-sale adjustments.
“Some of our lumber association members literally had to dump their old computer systems and invest in all new software and hardware to implement the tax,” Venezia told HCN.
What would be a fair compensation to dealers? Dunham did the math and suggested $5,500 per location.
The Board of Equalization had a different idea of an appropriate reimbursement: $735. A laughable amount, but considerably more than a previous BOE staff suggestion of $250.
Fast forward to the September hearing of the BOE, attended by Venezia and crew.
The legislators and their staffs seem to have no idea what they’ve gotten into. They’re not sure how many retailers in California sell products that should be taxed under the rule.
The meeting opened at 10 a.m., and the lumber tax agenda item concluded at 7:15 p.m., with the less-than-satisfying result of tabling the matter for a future hearing.
For fighting the good fight, for their patience and for the defense of small business, California dealers are to be commended.
“One fear out of all this is that the state could use the same ‘emergency legislation’ method to add on more fees/taxes to a wide range of products and services,” said Venezia. “Today it’s lumber. Tomorrow it could be Italian sausages.