NRF: IRS Accounting rule change is “hidden tax increase”
Washington, D.C. — The National Retail Federation on Wednesday welcomed a letter from lawmakers urging the Internal Revenue Service to back off a proposed accounting rule change that could cost many retailers millions of dollars a year.
“Retailers already have one of the highest effective tax rates of any U.S. industry,” NRF VP and tax counsel Rachelle Bernstein said. “This move by the IRS would make that tax burden even higher and amount to a hidden tax increase. With the economy still recovering and retailers trying to create jobs, this is not the time to change a policy that has been in place for half a century.”
Several members of the House Ways and Means Committee, led by Representative Tim Griffin, R-Ark., today wrote to Treasury Secretary Jacob Lew asking that the IRS reconsider plans to modify regulations governing the retail inventory method of accounting. Used by many merchants, the method allows retailers to average out the cost of merchandise in inventory rather than tracking specific items. The committee members said the proposed changes would require creation of “costly new inventory tracking systems” and would cost retailers millions of dollars.
“Both effects would divert scarce resources from investments that could otherwise be made in additional jobs and economic growth for constituents in our districts,” the letter said. “We urge you to reconsider the disproportionate tax burden on smaller retailers that will result if the regulations are enacted as proposed.” The letter particularly noted that a small business regulatory analysis has not been performed as required by the Regulatory Flexibility Act.
H&M eyes August for U.S. online launch
H&M is finally tackling the online market, and plans to launch an e-commerce site in the U.S. in August.
The timing of the move for a brand synonymous with affordable fashion is opportune because it coincides with the heart of the back-to-school shopping season and sets the stage for the company to drive online sales during the holiday season.
The company, which runs an online site where consumers can browse through product offerings, is investing in IT, online sales and new brands in an effort to broaden its range. Come August, consumers will be able to purchase merchandise online, and the company stands to reach existing customers who prefer the convenience of online shopping, as well as potential new customers who don’t have convenient access to one of the 268 stores the company operates in 30 states.
“There is great potential in the growing online market. We are looking forward to launching our online sales in the U.S. in August. In parallel, we are continuing our work on the global rollout of H&M’s online store, with the aim of adding several new online countries during 2014,” said CEO Karl-Johan Persson. Persson did not identify other countries in the company’s plans for its online launch, but with a global portfolio of 2,900 stores in 49 countries, the company has plenty to choose from.
The announcement was made in conjunction with the company’s release of its first half-year sales for the period ended May 31, which increased by 5% compared to the same period last year. The company also indicated the second half of the year is off to a good start as well. A successful start for the company’s & Other Stories brand, as well as continued good performance by its Cos brand, have bolstered the company’s sales for the month with an increase of 14% in local currencies, compared to the same period last year.
H&M Hennes & Mauritz AB operates the H&M brand as well as Cos, Monki, Weekday, Cheap Monday, & Other Stories and H&M Home.
Tocata courts retailers with new mobile platform
PALO ALTO, Calif. — Tocata, a technology innovator in mobile e-commerce, is launching a front-end mobile platform for retailers which allows them to build immersive, revenue-driving mobile shopping experiences that can be deployed on tablets or smartphones, whether as apps or as HTML5.
“The enduring consumer love affair with tablets and smartphones has forced many retailers to build short-term mobile shopping strategies that fail to drive appreciable revenue,” said Joe Davis, CEO, Tocata. “We’ve built the only platform that gives retailers the tools they need to build, launch and manage mobile as a channel focused on capturing new revenue streams and a more satisfying way of engaging with consumers everywhere.”
The Tocata mobile platform addresses the problem of how to quickly build mobile strategies that leverage broader business investments, reflect consumer shopping behaviors and drive new revenue streams. The Tocata mobile platform integrates seamlessly with brands’ existing e-commerce systems and is designed from the ground up to deliver simplicity and agility. The platform is made up of three major elements, which together provide an integration platform for tying mobile to existing e-commerce systems, an experience studio for building immersive mobile content and a distribution system for launching across mobile devices.
After launch, Tocata’s Data Analytics measure the impact of mobile to the bottom line. Tocata’s analytics capture every touch, pinch or swipe, helping retailers optimize their mobile offering to increase revenue and conversions.
Tocata, formerly called Revel Touch, is based in Palo Alto, Calif. Its clients include Anthropologie, Condé Nast’s Lucky Magazine and Design Within Reach.