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Executive Voice: A chat with the head of the N.C. Retail Merchants Association

As president and general counsel of the North Carolina Retail Merchants Association, it’s Andy Ellen’s job to keep up with the issues and proposed law changes that might impact the bottom line of retail merchants, big and small, that are doing business in North Carolina.

In early February the NCRMA launched a new alliance initiative with local law enforcement agencies to tackle organized retail crime cases in the Carolinas, an issue that Ellen says is costing the retail industry nearly $30 billion annually.

Andy Ellen, CEO of the North Carolina Retail Merchants Association, is photographed at his Raleigh office on Feb. 22.

Andy Ellen, CEO of the North Carolina Retail Merchants Association, is photographed at his Raleigh office on Feb. 22. KAITLIN MCKEOWN


“This is more than just a teenager stealing a pair of sunglasses,” he says. Ellen says that for more than 25 years the association had operated a loss prevention group but wasn’t always working in concert with local law enforcement.

“They realized that organized retail crime may be tied to the drug trade, … and this led to both law enforcement and the retail community deciding that a cooperative partnership was the best opportunity to stop organized retail crime in North Carolina,” Ellen says.

What would you say are the top three biggest economic challenges that retail merchants in North Carolina are facing today? 1) There is still an uneven playing field as to sales tax between Internet retailers and brick-and-mortar retailers that employ North Carolinians, pay income taxes and contribute to their communities. It’s time for Congress to stop picking winners and losers and require all retailers to collect sales tax on every sale; 2) Complying with federal and state regulations that add a layer of expense to retail businesses often with little to no benefit to consumers; and 3) Educating potential employees that retail can be a great career path so that North Carolina retailers maintain a quality workforce. In the past two weeks, we’ve seen upper management retire from two major grocery retail chains who started their careers by bagging groceries. This type of longevity and upward mobility is common in the retail sector – the largest private employer in North Carolina.

What are some of the hot topics to watch in the General Assembly this next short and long sessions? The implementation of the new sales tax on installations, repairs and maintenance; ensuring that pharmacists can continue to serve Medicaid recipients as North Carolina transitions to a managed care environment; addressing the National Labor Relations Board decision on joint-employer status for franchisees and franchisors; and hopefully a look at transitioning North Carolina from a control state to the private market for the sale of spirituous liquors.

Speaking of alcoholic beverages, you had also helped lobby for state law changes that now allow retailers to sell beer growlers. What was one of the most “fun” agenda items that you’ve helped lobby on behalf of NCRMA? I have two favorites. 1) In 2008, we passed legislation to allow retailers to hold beer tastings. The two bill sponsors were political opposites who brought different strengths to the table – now U.S. Sen. Thom Tillis and current U.S. Senate candidate Deborah Ross. The bill passed pretty overwhelmingly; 2) In 2011, I was one of three negotiators for workers’ compensation reform that changed the landscape in North Carolina. There were so many sub-issues and political maneuvers. It would have been a great case study in a college political science class.
Which agenda item do you think was the most important so far in your career with NCRMA? Without a doubt, it would be the repeal of the local privilege license tax in 2014. This was an antiquated tax structure that was being abused by cities throughout North Carolina to unfairly target retailers. Some retailers were charged more than $45,000 for a single location and other retailers saw their local privilege license tax increase from $100 per year to $10,000 overnight with no recourse. All the while, other industries paid $25 or $0 in local privilege license taxes. NCRMA has such a diverse membership from different retail trade lines that sometimes a legislative issue does not impact all of our members, but the privilege license tax touched every single one of our members.

Do you think there should be an increase of the minimum wage rate? Not while North Carolina’s economy is still in recovery mode. If the minimum wage is increased, employees who are being paid more than the minimum wage will also want an increase in their wages. So the employee that who being paid $10 or $12 per hour now demands $15 to $20 per hour. Not only is there an increase in the wage, there is also an increase in FICA, unemployment insurance, workers’ compensation costs, etc., because these expenses are all tied to the payroll amount. The question then becomes do these increased wages result in increased productivity?

Do you think there’s any chance that the annual Tax-Free Weekend will return to North Carolina? The General Assembly has made a policy decision to move away from specific tax credits and use those funds instead to lower everyone’s personal income tax and corporate taxes. The sales tax holiday was one of those. It will take consumers expressing the need for the sales tax holiday to their legislators if there is any chance of consumers having this tax break again.

Article By: Amanda Hoyle, Staff Writing Triangle Business Journal
Published on: March 4, 2016

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