Lobbying and consulting services could soon be subject to sales tax under Governor John Kasich’s budget proposal. House Bill 59, the governor’s expansive budget bill, proposes to decrease the state sales tax rate, but makes up for lost revenue by increasing the services subject to sales tax. All service transactions would be subject to the tax unless specifically exempted in the bill, including legal and accounting services.

You can view a list of the services that will be covered by the sales tax here.

While Governor Kasich predicts lobbyists will attempt to remove the tax on their industry from the budget bill, a Florida Institute of CPAs lobbyist claims it’s not just self-interest–determining who is taxed and who pays can be tricky when lobbying firms hire both accountants and lawyers to assist with projects.

If passed, the sales tax will apply to all non-exempt services rendered on or after September 1, 2013.

The American League of Lobbyists has issued a statement in response to President Obama’s State of the Union Address on Tuesday night.

Monte Ward, the organization’s president, said on their site: “Lobbyists are the professional advocates who help educate lawmakers every day about how their action (or inaction) affects the nation.  Lobbyists will be critical components helping our federal lawmakers to understand the implications of their votes on the issues that they will tackle.”

The American League of Lobbyists statement provides a summary of the group’s self understanding and a reflection on the nature of the lobbying industry, with an eye to the future. You can find a pdf file of their “Recommendations for Improving the Regulation of Federal Lobbyists” at this link.

Secretary of State Jason Kander, sworn in on January 14, 2013, has adopted a new ethics policy barring the staff in his office from accepting gifts from lobbyists.

Kander’s stated purpose was to give the public confidence that the office is being run in a nonpartisan and fair way.

State administrative policy already curtails what state employees may accept from lobbyists, but agencies are free to adopt stricter guidelines.

Campaign Finance

“Obama Campaign Fined $375,000” by Eliza Newlin Carney in Roll Call.

“Supreme Court won’t hear campaign finance arguments from anti-abortion group” by The Associated Press in The Washington Post.

Connecticut: “Former State Sen. Ernest Newton Arrested” by Mark Pazniokas in the Hartford Guardian.

Lobbying

“2013 Lobbying Certificate Program Calendar Released” on the American League of Lobbyists website.

“K Street Files: MPAA Casts Strahan” by Kate Ackley in Roll Call.

“Confessions of a Young Lobbyist on Capitol Hill” by Mickey Leibner in Roll Call.

“K Street Files: Airline Group Lands New Staffer, Lawsuit; Former Senators Lobbying” by Kate Ackley in Roll Call.

Ethics

“Cynthia Bauerly, FEC Commissioner, To Resign On February 1” by Paul Blumenthal in the Huffington Post.

Idaho: “Idaho lawmakers could create ethics committee” by Justin Corr in KTVB News.

South Carolina: “S.C. lawmakers have packed 2013 agenda” by Stephen Largen in the Post and Courier.

Legislative Issues

“Utah lawmaker wants to dump must-vote rule” by Robert Gehrke in The Salt Lake Tribune.

Campaign Finance

“Political Spending Sets New Records During Tumultuous Year” by Eliza Newlin Carney in Roll Call.

California:  “Lawmakers try to curb anonymous political donations in California” by Michael J. Mishak in the Los Angeles Times.

Canada: “ $100 lid on private political donations enacted” by Marian Scott in the Montreal Gazette.

Idaho: “Campaign Finance Loopholes Have Some Wondering: Who’s Watching the Money?” by Melissa Davlin in the Twin Falls Times-News.

Lobbying

“In Congress, relatives lobby on bills before family members” by Mark Zaleski (Associated Press) in The Washington Post.

Tennessee: “Proposed bill limits make Tenn. lobbyists scramble” by Erik Schelzig (Associated Press) in the San Antonio Express-News.

Ethics

District of Columbia: “Year of convictions doesn’t end D.C. corruption probes” by Alan Blinder in the Examiner.

Georgia:  “Ethics likely on General Assembly agenda” by Michael Davis in the Jackson Progress-Argus.

Social Media

“Social Media 2012: A Look Back” by Pam Greenberg in NCSL’s The Thicket.

Legislative Issues

“From Congress to Halls of State, in New Hampshire, Women Rule” by Katherine Q. Seelye in The New York Times.

Q. I am an in-house employee; however, I am not a registered lobbyist in my responsible state. Although I engage in lobbying activities from time to time, I do not meet the state’s registration threshold. However, other people from my company are registered. Do I have to disclose my expenditure and/or compensation for lobbying activities on company reports?

A. In some jurisdictions, although you are not a registered lobbyist, you may be required to include your expenditure and/or compensation information on company lobbying disclosure reports. There are 27 states requiring some level of reporting for non-lobbyist employees, including Arkansas, California, Georgia, Illinois, Indiana, Massachusetts, Michigan, and Wisconsin.

Every state treats non-lobbyist reporting differently. For example, in California, you are only required to include your compensation and reimbursed expenditures on a quarterly employer report if you spend more than 10% or more of your compensated time in a calendar month engaging in lobbying activities. In states such as North Carolina, Illinois, or New Jersey, permissible expenditures on behalf of public officials must be reported by the employer or registered lobbyist.

In the above jurisdictions where your company has an active lobbying presence, monitoring potential reportable activity is incredibly important. Although your level of activity may not necessitate registration in a state, you must become familiar with the state’s non-lobbyist reporting requirements, and carefully track activity, which may include the following:

• Compensation for lobbying activity;
• Personal reimbursed expenditures for food, travel, or lodging in connection with lobbying activity;
• Expenditures on behalf of public officials or employees;
• Sponsorships for events where public officials or employees will be present and receive a benefit; and/or
• Subject matter lobbied, including agencies contacted.

In sum, as you are reviewing your potential lobbyist registration obligations for the new year, it is just as important to review your potential reporting obligations as a non-lobbyist employee in the jurisdictions where your level of activity does not require registration.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: marketing@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

National:

NRA Power and Money Goes a Long Way in States

The GOP’s Electoral College Scheme

Federal:

Colbert Super PAC to Give to Charities

Crossroads GPS Claim: What Karl Rove’s dark money nonprofit told the IRS

From the States and Municipalities:

Alaska

Legislative Aide Resigns after Anti-Islamic Agenda Crosses into Public Role

Arkansas

Admitted Inappropriate Relationship Threatens McDaniel’s 2014 Bid to Become Arkansas’ Governor

California

More Valuable Gifts, Contributions Allowed to Politicians in 2013

California

State Political Watchdog to Enforce San Bernardino County’s Campaign Finance Ordinance

Louisiana

New Orleans Mayor Mitch Landrieu to End Contracts with Firm Tied to Ray Nagin Bribery Probe

New York

Cup of Coffee Limit Perks Up Again

New York

NY State Urges Aetna to Reveal Political Spending

Washington

House Bill Would Impose Fees on Lobbyists, Others

State and Federal Communications produces a weekly summary of national news, offering more than 80 articles per week focused on ethics, lobbying, and campaign finance.

News You Can Use is a news service provided at no charge only to clients of our online Executive Source Guides, or ALERTS™ consulting clients.

Campaign Finance

“D.C. Council pushes campaign finance to ’13” by Tom Howell, Jr. in The Washington Times.

Rhode Island: “R.I. House Speaker’s November opponent cleared of campaign wrongdoing” by Philip Marcelo in the Providence Journal.

Lobbying

“K Street Files: Progressives Come, Single Out ‘Naughty’ Lawmakers” by Kate Ackley in Roll Call.

“Clock running out for passing big bills” by Kevin Bogardus and Bernie Becker in The Hill.

“APOC complaint accuses Coffey of failing to register as a lobbyist” by Lisa Demer in the Anchorage Daily News.

“Cup of coffee limit perks up again” by Rick Karlin in the Albany Times Union.

Lobbying

“The top 10 lobbying victories of this year” by Kevin Bogardus in The Hill.

“K Street gathers strength behind Hurricane Sandy relief bill” by Kevin Bogardus in The Hill.

“Former Texas Congressman Joins King & Spalding Lobbying Team” by Matthew Huisman in The Blog of Legal Times.

Wisconsin: “Milwaukee County’s lobbying list is somewhat vague” by Steve Schultze in the Milwaukee Journal Sentinel.

Campaign Finance

“Analysis: Campaign Finance Reform Takes a Step Forward in Albany” by Gabe Pressman on NBC New York.

Ethics

“House Names Conaway as Ethics Chairman” by Amanda Becker in Roll Call.

Campaign Finance

“The Question at the Heart of Citizens United” by Paul Sherman in Jurist.

“D.C. campaign finance misdeeds call for further inquiry” opinion piece by Colbert I. King in the Washington Post.

Lobbying

“New lobbying firm spans both sides of the aisle” by AnnMarie Timmins in the Concord Monitor.

Ethics

“House Ethics Confirms Cases of Owens, Schock” by Amanda Becker in Roll Call.

Oklahoma:  “Ethics Commission top post to be offered to 1 of 4 finalists” by Michael McNutt in Tulsa World.

South Carolina:  “Haley tells ethics panel their work will produce results” by Tim Smith in the Greenville News.

Legislative Issues

Maine: “Campaign tracking becoming year-round practice in Maine” by Glenn Adams (Associated Press) in the Bangor Daily News.

North Dakota:  “Finding room at the inn isn’t always easy for legislators” by Nick Smith in the Bismarck Tribune.

Texas:  “Seeking Fresh Policies and Faces, Lawmakers Push for Term Limits” by Ross Ramsey in the New York Times.

Open Government

South Dakota:  “Open government receives boost” by David Montgomery in the Argus Leader.

Federal:

Jesse Jackson Jr. Resigns from Congress, Acknowledges Federal Probe

The Un-Super PACs

From the States and Municipalities:

California

Ex-Treasurer to Democrats Receives 8-Year Sentence

California

State Lawmaker Brothers Accused of Money Laundering

District of Columbia

Crafting D.C. Ethics Bill Proving Difficult

Florida

State Ethics Commission Says Jacksonville Council Member’s Poker Party is OK

Georgia

Legislators Ask Governor to Let Indicted Victor Hill Take Office of Sheriff on January 1

Indiana

Indiana House Speaker Brian Bosma Criticized for Hiring Lobbyist

Maine

Anti-Gay Marriage Group Fined by Maine Ethics Commission

Missouri

Freebies from Lobbyists Becoming Harder to Track in Missouri

North Carolina

Appeals Court Throws Out Suit Testing ‘Stand by Your Ad’

Pennsylvania

Former Pennsylvania Democratic Leader Mellow Would Set ‘Record’ by Going to Jail

State and Federal Communications produces a weekly summary of national news, offering more than 80 articles per week focused on ethics, lobbying, and campaign finance.

News You Can Use is a news service provided at no charge only to clients of our online Executive Source Guides, or ALERTS™ consulting clients.

Massachusetts lobbyists using a LinkedIn online discussion group are not prohibited from soliciting contributions for candidates from the group.

The Office of Campaign and Political Finance (OCPF) issued an opinion, AO-12-03, on November 20, detailing when a lobbyist can solicit contributions on LinkedIn without being considered a regulated intermediary or conduit bundling contributions. The OCPF considers the use of social media, such as LinkedIn, as a “personal service” that is generally exempt from campaign finance limitations or disclosure requirements.

Asking members of a lobbyist’s LinkedIn group “to contribute directly to candidates does not involve ‘arranging’ for the making of contributions” requiring application the law,” the opinion holds. However, a lobbyist could be regulated if contributions are either “‘delivered, whether in person or by mail [by the regulated intermediary], to a particular candidate or such candidate’s authorized committee or agent’ or made ‘in a manner that identifies in writing the person who arranged the making of the contributions.’” For example, in the instance of direct contributions to a candidate, if a lobbyists “actually instructs the contributors to identity, with a note on their contribution checks, the legislative or executive agent as the person responsible for arranging the contribution, the legislative or executive agent would be subject” to regulation.

The restrictions for bundling apply only if at least one of the bundled contributions is more than $156. The OCPF also opined that persons who are not lobbyists may use LinkedIn or similar sites to solicit contributions for candidates, with certain restrictions for public employees.

Lobbying

“K Street Files: On a Mission, Lobbying Power to the People” by Janie Lorber and Kate Ackley in Roll Call.

“Lobbying is stepped up on ‘fiscal cliff’ talks” by Maria Recio and David Lightman in the Sacramento Bee.

“Influence game: Election over, campaign continues” by Stephen Ohlemacher (Associated Press) in the Abilene Reporter News.

“With second term assured, Obama aides eye jobs as lobbyists on K Street” by Kevin Bogardus in The Hill.

Florida:  “House Speaker Dean Cannon jumps from legislating to lobbying” by Jason Garcia in the Orlando Sentinel.

Missouri: “Freebies from lobbyists becoming harder to track in Missouri” by Virginia Young in the St. Louis Post-Dispatch.

Campaign Finance

“Bevy of Fixes Might Complicate Efforts To Reshape Campaign Finance System” by Eliza Newlin Carney in Roll Call.

“States crack down on campaigning nonprofits” by Matea Gold and Chris Megerian in the Los Angeles Times.

“Democratic super PACs get jump on 2014, 2016” by Kenneth P. Vogel in Politico.

California:  “2 lawmakers accused of money laundering” by Lance Williams in the San Francisco Chronicle.

Ethics

“Ex-state official loses job in ethics flap” by Laura A. Bischoff and Meagan Pant in the Dayton Daily News.

Wisconsin:  “Campaign, county work intertwined under Walker, prosecutor says” by Steve Schultze and Daniel Bice in the Milwaukee Journal Sentinel.

Q. I am a registered lobbyist who was asked to make an in-kind contribution on behalf of my company for an event to be held by a state political party. Is this permissible?

A. As a registered lobbyist, your contributions may be governed by two sets of laws: campaign finance and lobbying.

First, you must determine whether the state would consider the in-kind payment to be a contribution or a lobbying expenditure.

If the in-kind payment is determined by the state’s governing body to be a contribution, then this contribution must be compliant with the campaign finance laws. You must first determine if the amount and source of funding are permissible. Assuming permissibility of the contribution, potential restrictions on contributions facilitated by lobbyists and the reportability of contributions facilitated by lobbyists will need to be reviewed. In some states, once the in-kind contribution is made, the lobbyist and the lobbyist’s principal may not have additional involvement with the planning of the event, but will be permitted to attend.

Where the state considers the in-kind payment to be a lobbying expenditure and not a political contribution, you must ensure that the expenditure will not exceed the state’s gift limit. The pro-rata share of the expenditure attributable to all public officials who attend the event may be reportable on a disclosure report.

While this analysis will vary from state to state, it is important to be cautious when making in-kind payments.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: marketing@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.