LEGISLATIVE AFFAIRS: August Legislative Update
Philip Weiden | August 2018
Key victories for Realtors and the industry have come to fruition over the summer. The National Flood Insurance Program has been extended, which will facilitate thousands of home sales that otherwise would have stalled due to banks not issuing loans without the insurance in flood prone areas.
We are still pushing a five-year reauthorization and hoping that this can be done possibly this year or next year. Flood insurance rates continue to go up each year in many areas even with the flood insurance.
On Tuesday, July 24, the House Judiciary Committee held a hearing on “Examining the Wayfair Decision and its Ramifications for Consumers and Small Businesses.” The Supreme Court’s holding in Wayfair overturned a 26-year precedent and gives states the ability to require that some online retailers charge and remit sales tax on purchases made by residents, even absent a physical presence within the state. This is a positive step in the direction of leveling the playing field between brick-and-mortar retailers, customers of commercial real estate professionals and e-commerce sites.
NAR sent a letter thanking the committee for its attention on this issue, and reiterating support for leveling the playing field between online and brick-and-mortar retailers via Internet sales tax fairness policies.
The hearing, overseen by Chairman U.S. Rep. Bob Goodlatte (R-VA) and Ranking Member U.S. Rep. Jerrold Nadler (D-NY), featured a panel of witnesses including small business owners, tax policy experts, and representatives from the National Retail Federation, the National Conference of State Legislatures, and the MultiState Associates, Inc. Questions focused on the post-Wayfair landscape, including potential burdens to small online businesses and limitations of the ruling itself. Several witnesses pointed out that software is available that can calculate sales tax on purchases down to the zip code, and that most states are waiting until January 2019 to change their current sales tax laws, to reduce confusion on tax filings. Congressman David Cicilline (D-RI), the Ranking Member of the Subcommittee on Regulatory Reform, Commercial and Antitrust Law, clarified in his closing statement that the Wayfair ruling does not create a new tax—it simply gives authority to states to collect a tax already owed.
On Monday July 23, staff from NAR’s federal advocacy team met with analysts from the Government Accounting Office to discuss the current state of Fannie Mae and Freddie Mac in conservatorship and its impact on the real estate market. This meeting was a follow up to a round of meetings the GAO held with NAR and other industry players in 2014 that resulted in a study.
NAR staff emphasized to the GAO that while not perfect, Fannie Mae and Freddie Mac have done a good job of providing steady, stable and affordable credit to a broad market during very difficult times. Furthermore, preserving the benefits of the current system should be a primary goal of any reform efforts in the coming years.
In addition to engaging with the GAO, NAR recently brought together a panel of industry experts to discuss the future of Fannie Mae and Freddie Mac. NAR will continue to actively engage in the discussion to protect the vibrant, national housing finance market.