Walorski Shares Feedback From Hoosier Businesses Impacted by Tariffs at Ways and Means Hearing

Last week, Congresswoman Jackie Walorski (IN-02) shared feedback from Hoosier businesses affected by steel and aluminum tariffs at a House Ways and Means Committee hearing on the impact of tariffs on the U.S. economy and jobs.

“Historic tax cuts and regulatory reforms have revived America’s economy, but I am constantly hearing from businesses in northern Indiana that steel and aluminum tariffs are driving up costs and making it more difficult for them to grow and create jobs,” Walorski said after the hearing.

“The administration has taken steps to narrow these tariffs to better target unfair trade, but more must be done to protect businesses and jobs here at home. I will continue listening to Hoosier manufacturers, farmers and workers, and making sure their voices are heard so we can keep our economic momentum going.”

Video of Walorski sharing local businesses’ feedback at the hearing:

She read the following quotes from Hoosier job creators in a wide range of industries:

• (We’ve seen) a 50% increase (in the price of steel), mostly since the tariffs were announced. Additionally, there is a shortage of steel. We are furloughing the production line in (one facility) today and will probably have to furlough some of the guys in (our main facility) later in the week due to lack of availability of material. We have raised prices to our customers but because (our product is) a low margin item – the combination of the increase and the lack of availability is affecting sales.”

• “We cannot switch to a U.S. source, and it would take 1 to 2 years for us to get approval from our customers if there was a U.S. source. We will continue to import steel and will pay the duties. So far we have incurred about $15,000 in tariff costs with a potential of another $240,000 based upon the orders we have already booked with (our) Japanese steel supplier. We are moving forward with our exclusion requests; so far the cost has been close to 100 hours to complete these exemption forms along with some legal costs for review and advice.”

• “We have rolling shortages of steel and we are on allocation (from our supplier in Utah) … Prices had already gone up 25% and 30% respectively (on aluminum and steel) because of speculation. Now we are seeing a trend past 30-35% each. Of course, I am livid.”

• “We observed steel prices starting to move up in early 2017 on just the talk of potential steel tariffs and a sharp escalation in steel prices in the last 3 months as the tariffs started to become a reality. This has resulted in a 15% to 29% increase in the cost of our steel. To put this in perspective, our increase in steel cost is larger than the entire cost of providing health insurance to our workforce.”

• “We are the sole manufacturer left in the United States that manufactures this type of product. Our competitors import all or most of their finished product from either Mexico, China, Vietnam, etc., therefore avoiding any impact of this tariff…The bottom line is this, if you raise our steel and aluminum prices, our prices will have to increase in order to cover the cost. Our foreign competitors will not be affected. … We currently purchase all our steel and aluminum from domestic sources.”

• “We are in the process of trying to build a 147,000-square-foot warehouse. (The company building the warehouse) gets their steel from Canada, a country exempted from the steel tariff. However, we are unable to get a firm quote even out of Canada, because prices are beginning to rise there with so much demand shifted to Canada. It is not on hold – we have to build it – so we are at the mercy of a volatile market.”

• “When purchasing raw materials, we give preference to domestic steel mills wherever possible. We enjoy long, outstanding relationships with many domestic mills. We want them to thrive. … The actual dynamics of the entire metalworking market have evolved in the last 40 years. … In some cases, we find that domestic mills cannot meet the quality standards required by our customers; or they cannot meet the quality standards at a competitive cost. In those cases, we will buy foreign material. … Why put a tariff on these items?”

Tech Talk: Special Locations; Special Outcomes

Yes, we understand technology allows business processes to take place today that were never possible before. Yes, we know that people – no doubt about it – are the most important asset in any organization.

But location still plays a factor. And location is a central theme to two recent EchoChamber conversations. The guests: Rich Carlton of Data Realty in South Bend (where tech is thriving on the site of the former auto manufacturing giant Studebaker) and John Hurley of SmartFile and the Union 525 (the scale-up home in Indianapolis that is becoming the centerpiece of innovation and activity).

A few nuggets from each are below. But we encourage you to check out their full conversations.

Carlton

  • Data Realty family of companies is making 40 million calculations a day on data coming in from around the world
  • Talent from Stanford, MIT, Carnegie-Mellon and more now calling South Bend region home
  • Goals include becoming the first company out of South Bend to be valued at $1 billion
  • “If South Bend was a stock, I’d be buying. We’re in the infancy of what we’re going to be able to do.”

Hurley

  • Celebrating its ninth anniversary – “we’re like a grandfather in tech” – SmartFile manages digital content to meet regulatory and compliance standards for 1,400 organizations in 80 countries
  • Hurley loves the “collisions” at Union 525 where “great risk takers and thinkers are all there creating a lot of energy”
  • He is now receiving near daily communication from venture capitalists looking at Indiana and the Midwest. Union 525 is a part of helping to make that happen
  • The next phases of tech development on the southern edge of Indianapolis’ downtown are being formulated

And be sure to check out this week’s new episode featuring Brian Schroeder of Eskenazi Health. The subject is wellness – utilizing workplace wellness as a business strategy and the idea that we can move from treating chronic disease with a pill to utilizing lifestyle medicine.

Subscribe to the EchoChamber via iTunes or wherever you get your podcasts to be sure not to miss out on future guests from the innovation, business, education and political worlds.

Indiana Chamber Comments on SaaS Tax Clarity Bill Signed Into Law Today

Bill Waltz, Indiana Chamber of Commerce vice president of taxation and public finance, comments on Senate Bill 257 being signed into law, providing clarity on the tax exempt status for software-as-a-service (SaaS) transactions:

“Since last summer, the Indiana Chamber has been leading the charge to see this clarification become law, with language originating in our tech policy committee. Our advocacy team and several members of the committee met with all the interested parties to build momentum and consensus. We put a lot of work into the effort because the stakes were high. The state’s significant momentum as an attractive place for innovative and entrepreneurial companies was in jeopardy without a sensible solution.

“And this policy is important not just for tech companies, but for those who do business with them. The new law is straightforward on what transactions are exempt. Having clarity around that will help grow Indiana’s software development economy, as well as prevent onerous taxation of other necessary business expenses throughout the business community.

“We thank Governor Holcomb for his leadership and legislators for listening to our members and taking this important step forward to further demonstrate Indiana’s technology commitment. The state is now in a very favorable position to reap very real economic benefits and attract more and more of the software-as-a-service industry.”

Sen. Travis Holdman, author of SB 257 (left) and the Chamber’s Bill Waltz 

Wrap-up: 2018 Indiana Safety and Health Conference

If you attended last week’s 2018 Indiana Safety and Health Conference & Expo, you most certainly came away with enhanced knowledge, new industry connections and the determination to make your workplace a safer and healthier one.

The largest safety and health conference in the state provided over 70 education sessions, leading industry speakers and access to more than 100 exhibitors and safety vendors over the course of three days in downtown Indianapolis.

The conference was sponsored by Gibson and presented by the Indiana Chamber of Commerce and the Central Indiana Chapter of American Society of Safety Engineers (ASSE), in partnership with INSafe and the Coalition for Construction Safety (CCS).

Kina Repp, keynote speaker for the opening general session (“It’s Your Safety, Don’t Give It Away”), shared her story of lessons learned from losing her arm to a moving conveyor belt 40 minutes into her job at a fish processing plant. She spent two months in the hospital and endured 11 surgeries.

At the time, Repp knew what she was doing was not safe. Today, she describes the ripple effect – the impact the accident had on her family, co-workers, supervisors and more.

“I made choices that day that hurt all those people,” she told the hushed conference attendees before posing two questions: “Whose life are you willing to change? What is it that you’re willing to trade your safety for?

Life – and safety – come down to choices, Repp attests. In looking back at her decision to take advantage of her second chance, while at the same time offering guidance to others in determining their safety outcomes, she relies on a Henry Ford quote: “Whether you think you can, or you think you can’t – you’re right.”

March 14 keynote speaker Sgt. Sammy L. Davis delivered a poignant recollection of the Vietnam War. A powerful philosophy guided him during the battle that won him a Congressional Medal of Honor: “If I don’t do my job, the guys behind me don’t stand a chance.”

Davis’ actions on November 18, 1967, inspired the wartime service depicted in Forrest Gump, including his citation ceremony with actor Tom Hank’s head added on top of Davis’s via computer-generated imagery. Last week, Davis was bestowed Indiana’s highest honor, the Sachem Award.

The Governor’s Workplace Safety Awards were presented to organizations and individuals that have made health and safety a priority. Find the press release with a list of winners here.

See photos from the awards luncheon and the conference here.

Ice Miller is the conference’s platinum sponsor. Gold sponsors are Board of Certified Safety Professionals (BCSP); Community Employer Health; and RMS-Safety. Silver sponsors are Athletico Physical Therapy; CLMI Safety Training; Faztek, LLC; Indiana Safety & Supply; Indiana University School of Public Health Safety Program; KHA Online SDS™; Safety Management Group; and Sentry Safety Services, Inc.

The dates are already set for the 2019 Indiana Safety and Health Conference & Expo! Mark your calendars for February 26-28, 2019 at the Indiana Convention Center in downtown Indianapolis.

 

 

 

 

 

 

 

 

 

 

 

 

Find conference materials and more at www.insafetyconf.com.

Tech Talk: McDonald Lights Economic Fire

John McDonald, CEO of ClearObject and chair of the Indiana Chamber’s Tech Policy Committee, is proficient in many areas – including crafting analogies.

In the current BizVoice® magazine, he authors a thoughtful column titled “Indiana’s Economy: Great for Business, Not Yet for Entrepreneurs.” On the analogy side, consider this excerpt:

“If the spark that ignites an entrepreneurial company is initiative, then what are the other necessary components that fuel the fire of innovation? Like we learned in elementary school, fire requires fuel, oxygen and heat, and if any of these elements is removed, the fire stops.

“Similarly, entrepreneurship requires three elements: ideas, capital and skilled people, with the spark of initiative to light the flame. Take any of these away and the fire of an entrepreneurial company ‘flames out.’ “

Check out John’s full column.

The focus of the March-April issue is on Outstanding Talent. Nearly 20 stories outline programs, initiatives and people making a difference in the worlds of education and workforce development. Among the features:

  • The Excel Center, where adults gain the assistance and pair it with their own motivation to reach new heights in education and career opportunities
  • The Crossing Schools, where high school students in need of direction find it in the form of hands-on learning and work experiences
  • The International School of Indiana, where a challenging curriculum is only part of the mix for high-performing students

The Indiana Chamber is highlighted through the Foundation’s Business Champions Advisory Network, Indiana INTERNnet’s 12th annual IMPACT Award winners and an overview of the organization’s workforce development efforts.

View the full issue.

Video: BizVoice Focuses on Education, Workforce in New Edition

Our Tom Schuman gives a two-minute look into the new March/April edition of BizVoice® magazine, detailing stories on education and workforce initiatives, as well as a peak into Indiana’s political history with a new entry in our yearlong Road Trip Treasures series. Additionally, a guest columnist tackles the needed ingredients for Indiana to ignite the entrepreneurial fire.

Watch:

Technology on Tap at Safety Conference, March 12-14

Technology has advanced in the workplace and not only from the standpoint of evolving the products or processes used in specific industries. Advanced technology has also entered the world of workplace safety.

An emphasis on technology in safety is one of the educational tracks at this year’s Indiana Safety and Health Conference & Expo.

For example, one of the sessions focuses on the impact of virtual reality on safety training. The use of virtual reality in the workplace can allow workers to practice their skills, while lowering costs and increasing revenue. It also displays a commitment to worker safety.

Several other technology-focused sessions include effective safety management, management safety principles and solutions, updates in education and consulting skills, and INSafe/safety fundamentals.

The conference is less than two weeks away, but there is still time to register. Sending two or more people allows for a 20% discount using promo code “Group20” at checkout.

For a complete list of educational tracks and schedule of events, visit www.INsafetyconf.com.

The 2018 Indiana Safety and Health Conference & Expo is presented by the Indiana Chamber of Commerce and the Central Indiana Chapter of American Society of Safety Engineers (ASSE), in partnership with INSafe and the Coalition for Construction Safety. Gibson is the conference sponsor.

Record 125 Companies Named Best Places to Work in Indiana

Best Places to Work in Indiana

A record number of Hoosier companies – 125 in total – have been named to the 2018 Best Places to Work in Indiana list.

“We have many tremendous employers in the state, so it’s great to see more and more companies take part in this effort to evaluate their workplace cultures and gain the recognition they deserve,” offers Indiana Chamber President Kevin Brinegar.”

“These organizations come from a wide variety of industries yet they all have a common thread. They continually demonstrate to their employees through their culture, communication, career opportunities, benefits and more how much they value their contributions.”

Read the press release here.

The actual rankings for the companies will be unveiled at a May 3 awards dinner at the Indiana Convention Center (Sagamore Ballroom) in downtown Indianapolis. Individual tickets and tables of 10 are available at www.indianachamber.com/specialevents.

Companies were determined through employer reports and comprehensive employee surveys. The Best Companies Group, which handled the selection process, oversees similar programs in 25 other states.

Winners were selected from four categories: small companies of between 15 and 74 U.S. employees; medium companies of between 75 and 249 U.S. employees; large companies of between 250 and 999 U.S. employees; and major companies with 1,000 or more U.S. employees. Out-of-state parent companies were eligible to participate if at least 15 full-time employees are in Indiana.

All companies that participated in the 2018 Best Places to Work program receive an in-depth evaluation identifying strengths and weaknesses according to their employees. In turn, this report can be used in developing or enhancing employee retention and recruitment programs.

Organizations on this year’s list that have displayed sustained excellence during the program’s 13-year history receive additional recognition.

Hall of Fame companies are those that have been named a Best Place to Work in Indiana at least 60% of the time in the program’s history; a total of 19 organizations on the 2018 list meet that criteria. Two companies – Edward Jones and Katz, Sapper & Miller – have made the Best Places to Work list all 13 years of the program.

For more information on the Best Places to Work program, go to www.bestplacestoworkIN.com.

The 2018 Best Places to Work in Indiana companies listed in alphabetical order, no ranking:

*Hall of Fame companies

Small Companies (15-74 U.S. employees) (57)
Company / Primary Indiana Location

Accutech Systems / Muncie
* Apex Benefits / Indianapolis
Bedel Financial Consulting, Inc.  / Indianapolis
Big City Cars / Fort Wayne
BLASTmedia / Fishers
Bloomerang / Indianapolis
BlueSky Technology Partners / Noblesville
Board of Certified Safety Professionals (BCSP) / Indianapolis
Brite Systems / Indianapolis
CENTURY 21 Scheetz / Multiple locations
CleanSlate Technology Group / Carmel
ClearObject, Inc. / Fishers
Clinical Architecture / Carmel
Community First Bank of Indiana / Kokomo
* Cripe / Indianapolis
DK Pierce and Associates / Zionsville
eimagine / Indianapolis
* FirstPerson / Indianapolis
General Insurance Services / Michigan City
Goelzer Investment Management, Inc. / Indianapolis
Greenlight Guru / Indianapolis
Grote Automotive / Fort Wayne
Guidon Design / Indianapolis
Hamilton County Tourism / Carmel
Hanapin Marketing / Bloomington
* Indesign, LLC / Indianapolis
Inovateus Solar LLC / South Bend
Insurance Management Group / Marion
JA Benefits, LLC / Bedford
Jackson Systems / Indianapolis
Lakeside Wealth Management / Chesterton
Leaf Software Solutions / Carmel
LHD Benefit Advisors / Indianapolis
mAccounting, LLC / Indianapolis
Magnum Logistics / Plainfield
Merritt Contracting / Lebanon
netlogx LLC / Indianapolis
Nix Companies / Poseyville
OfficeWorks / Indianapolis
OrthoPediatrics / Warsaw
Peepers by PeeperSpecs / Michigan City
Pondurance / Indianapolis
Probo Medical / Fishers
Public Safety Medical / Indianapolis
RESOURCE Commercial Real Estate / Indianapolis
RQAW  / Indianapolis
Sharpen Technologies Inc. / Indianapolis
Sigstr / Indianapolis
Springbuk / Indianapolis
T&W Corporation / Indianapolis
That’s Good HR / Indianapolis
The Garrett Companies / Greenwood
The Skillman Corporation / Indianapolis
University High School of Indiana / Carmel
Visit Indy / Indianapolis
VOSS Automotive / Fort Wayne
Wessler Engineering / Indianapolis

Medium Companies (75-249 U.S. employees) (30)
Company / Primary Indiana Location

American College of Education / Indianapolis
Blue Horseshoe / Carmel
Butler, Fairman & Seufert, Inc. / Indianapolis
CREA, LLC / Indianapolis
* E-gineering / Indianapolis
* Elements Financial Federal Credit Union / Indianapolis
Emarsys North America / Indianapolis
Envelop Group / Indianapolis
ESCO Communications / Indianapolis
First Internet Bank / Fishers
Formstack / Indianapolis
Fort Wayne Rescue Mission Ministries, Inc (DBA The Rescue Mission) / Fort Wayne
Gregory & Appel Insurance / Indianapolis
HWC Engineering, Inc. / Indianapolis
IDSolutions / Noblesville
J.C. Hart Company, Inc. / Carmel
Lessonly / Indianapolis
Merchants Bank of Indiana and PR Mortgage & Investments / Carmel
Midwest Mole / Greenfield
Morales Group, Inc. / Indianapolis
Moser Consulting / Indianapolis
Oak Street Funding LLC / Indianapolis
Parkview Wabash Hospital / Wabash
Peoples Bank SB / Munster
* Schmidt Associates, Inc. / Indianapolis
* Software Engineering Professionals (SEP) / Carmel
United Consulting Engineers / Indianapolis
United Way of Central Indiana / Indianapolis
Visiting Nurse and Hospice of the Wabash Valley / Terre Haute
Weddle Bros. Construction Co., Inc. / Bloomington

Large Companies (250-999 U.S. employees) (25)
Company / Primary Indiana Location

Aluminum Trailer Company / Nappanee
American Structurepoint, Inc. / Indianapolis
Appirio, A Wipro Company / Indianapolis
Bastian Solutions / Indianapolis
Blue 449 / Indianapolis
* Blue & Co., LLC / Carmel
* Brotherhood Mutual Insurance Company / Fort Wayne
Carbonite / Indianapolis
* Centier Bank / Merrillville
* FORUM Credit Union / Fishers
Hylant / Multiple locations
IPMG / West Lafayette
* Katz, Sapper & Miller / Indianapolis
Kemper CPA Group LLP / Multiple locations
* Monarch Beverage / Indianapolis
MutualBank / Muncie
Onebridge / Indianapolis
Ontario Systems / Muncie
Pacers Sports & Entertainment / Indianapolis
Parkview Huntington Hospital / Huntington
Parkview Noble Hospital / Kendallville
Parkview Whitley Hospital / Columbia City
Sikich / Indianapolis
The Kendall Group / Fort Wayne
* WestPoint Financial Group / Indianapolis

Major Companies (1,000+ U.S. employees) (13)
Company / Primary Indiana Location

Aerotek / Multiple locations
Ameristar Casino + Hotel East Chicago / East Chicago
* Capital Group / Carmel
CareSource / Indianapolis
Colliers International / Indianapolis
Comcast Corporation / Indianapolis
* Edward Jones / Multiple locations
First Merchants Bank / Muncie
* Horseshoe Casino / Hammond
Kronos Incorporated / Indianapolis
Perficient / Carmel
* Salesforce / Indianapolis
Total Quality Logistics / Indianapolis

Tech Talk: Making Progress at the Statehouse

An Indiana General Assembly analysis at the midway point of the session is always a bit tricky. We can tell you the current status of legislation, but with the caution that more negotiations, compromises and refinements are on the way.

Clarifying the tax status of software as a service (SaaS) is among the high-priority items. Bill Waltz, our tax policy expert, shares this insightful update:

Bill Waltz

As is often the case, the House and the Senate each have their own ideas on how best to address big issues. That is the current circumstance regarding the taxability of software utilized as the means of providing a service. Obtaining greater clarity on this subject is a priority of the Chamber and the Governor.

Senate Bill 257 embodies the efforts of the administration to clarify tax law in this arena. It was largely formulated by the Department of Revenue (DOR) and the Office of Management and Budget to serve as guidance for what is taxable and what is not. The bill is basically a codification of recent DOR rulings interpreting and applying its own information bulletin, which outlines a complicated set of factors and tests. The legislation is focused on what constitutes a retail transaction (sale) of a tangible good.

Essentially, the position of DOR is to tax the sale of prewritten off-the-shelf type software, including such software even if it is downloaded or accessed over the internet. But if it is customized software or software utilized in connection with what is primarily a service to a customer, it is omitted from the new statute and deemed not taxable.

The determinations in gray areas will remain fact sensitive, but the language is intended to make it clearer that software services are not taxable. The statutory provisions should operate to make people in the SaaS industry more comfortable in concluding that they do not need to collect sales tax, unless they are engaged in a transaction that falls squarely into the retail product sale category as set out in the legislation.

On the other hand, HB 1316 takes a different approach. It uses similar language as is in SB 257 but adds several unique twists to the picture. First, it creates a new lesser rate for prewritten off-the-shelf type of software – with the apparent objective of identifying and monitoring the tax revenues associated with these transactions. It excludes transactions where the software is acquired by a business to perform its core business purpose. This business-to-business exemption component is of course a very positive thing and should be embraced. Finally, it looks to the long term potential of sales involving software as the industry continues to expand, plus creates a trigger reducing the standard sales tax rate for when total collections exceed $250 million (a threshold so high that it is hardly foreseeable in the near future.)

Perhaps it makes the most sense to combine the good pieces of these competing bills to produce the best end result. The Chamber sees much merit in doing all that is possible to clarify the state of the law regarding SaaS as is addressed in the Senate bill. This is needed and would be a positive step. But while unique aspects of the House bill present some real concerns, it also includes the most solid of tax principles – don’t tax business inputs. Exempting business-to-business transactions would prove a terrific encouragement to the SaaS industry to conduct their businesses in Indiana.

In the second half of the session, the Chamber will be leading the charge to resolve the SaaS clarification issue to the fullest extent possible.

A variety of other tech policy priorities are still in play. Here is a brief summary.

Video: Midterm Evaluation of the Indiana General Assembly

Indiana Chamber President and CEO Kevin Brinegar provides a midterm evaluation of the 2018 Indiana General Assembly. Among the key bills that did not survive the first half of the session: raising the smoking age from 18 to 21 (a common-sense step for dealing with health care costs and lost productivity that causes more than $6 billion in annual impact). In addition, an effort to modernize the state’s local government system by consolidating the smallest townships was not brought for a vote.

Areas that are still a work in progress include reforming the state’s workforce development programs, incorporating computer science requirements into schools, clarifying tax treatment for Software-as-a-Service (SaaS) and continuing to move forward on long-term water resource management.