Special-interest Groups In Full Form by Lesley Hensell
It's that time again. With the legislature back in session and politics in full swing in our nation's capital, the National Association of REALTORS® and other special-interest groups are in full lobbying form, pushing for laws that will benefit their constituents. With a lame-duck president serving his last year in office and a Republican Congress that has lost all of its previously admirable revolutionary tendencies, don't expect any major legislation to come to fruition. This leaves, however, plenty of time on lawmakers' hands to mess with details and minor provisions causing headaches for business. For example, to the great delight of the National Association of Realtors, U.S. Reps. Wally Herger (R- Calif.) and John S. Tanner (D-Tenn.) have introduced a bill that would repeal a detrimental tax provision enacted last year. As currently written, the provision particularly harms small business by requiring up-front payment of tax on all gains realized from the sale of a business, even if the gain is received through installments. In many installment arrangements, this provision would require the seller to pay tax on income not yet received, with cash not yet available. This could have a disastrous impact on sales of small businesses. "In certain cases, it is desirable for sellers of small businesses to finance sales, because purchasers of such properties often have difficulty obtaining financing," said Dennis Cronk, president of NAR. "As a result, the seller provides the financing and structures the payments as a series of installments to accommodate the purchaser's cash flow. Or, seller financing might be desirable for a seller who is retiring and would like to receive payments as steady income. "Before the seller financing provision was enacted last year, business owners only had to pay taxes on the payments as they were made – they were not required to recognize all income from the sale up-front for tax purposes. Now, these owners have been hit with an unfair tax obligation," Cronk added. The NAR points out that the original provision was intended to close loopholes for certain large transactions by big corporations, but its real effect will make it very difficult to sell small businesses. Sales could either be halted, or, in some cases, sale prices could drop dramatically. Legislation to change this provision has broad co-sponsorship and, hopefully, will result in the elimination of this unfair law before the year is out. On another front, the NAR has indicated that its top legislative priority for the year will be to encourage passage of federal legislation needed to guard against the theft, reuse and distribution of online data. As more real estate information is made available through the Internet, so are more opportunities for pirates to steal the data and reuse it to the detriment of consumers and real estate practitioners. "Changes are occurring in the real estate industry because the Internet is empowering consumers and raising their expectations," Cronk said. "In many cases, people who know technology – but very little about real estate – are getting into the market. The piracy of online data poses a threat to everyone who is using the Internet to gain real estate information." A bill currently in the U.S. House, "The Collections of Information Antipiracy Act," would prohibit the copying, repackaging and re-marketing of data collections, including real estate data, that is compiled, packaged, and presented in a certain manner by individuals in the course of their business. The bill was reported out of the House Judiciary Committee last year and is now pending consideration by the full House. The NAR claims that Realtors – especially those interested in protecting the integrity of MLS – placed 5,000 phone calls to Congress on the database protection issue last year. | 
