Kim R. Todora, PPAI
PPAI L.E.A.D. 2012:
Legislative Agenda And Industry Position Statements
IRVING, Tex. (March 6, 2012) – Promotional Products Association International (PPAI; ppai.org), the not-for-profit
association for more than 10,000 member companies of the $16.5 billion promotional products industry, presents
legislative agenda and industry positions statements on Capitol Hill to educate federal agencies through its
Legislative, Education and Action Day (L.E.A.D.), March 7-8, 2012 in Washington, D.C.
INDUSTRY POSITION STATEMENTS
1. Promotional Products—A Vibrant, Dynamic Industry
There are more than 32,000 promotional products companies in the United States, generating $16.5 billion in annual
revenues and employing more than 457,000 Americans. More than 95 percent of the businesses in the promotional
products industry are considered to be small businesses—and face the challenges unique to this business category.
Promotional products are logoed or imprinted items that educate, recruit, highlight safety awareness, urge organ
donations, and encourage healthy living and lifestyle choices. Promotional products recognize and reward employee
achievements and inspire action. Promotional products are used to celebrate milestones, sign legislation and
reinforce critical messages.
Viral, mobile, highly targeted and inexpensive, promotional products are the only advertising medium capable of
engaging all five senses. Adding a message to a tangible product turns an ordinary message into a marketing
experience the audience can see, touch, hear, smell and even taste.
Promotional products are the most cost-effective method for businesses to market their products and services. These
products are often used to reinforce personal relationships with customers, clients and prospects. In this period of
economic uncertainty, it is more important than ever to provide a personal connection.
2. Promotional Products And Independent Contractors
Using independent contractors to perform sales-related services is a long-standing practice in the promotional
products industry. In the industry, the distributor develops solutions to marketing challenges through the innovative
use of promotional products and is a resource to corporate buyers, marketing professionals and others. A supplier
manufactures, imports, converts, imprints or otherwise produces or processes promotional products offered for sale
through distributors and the distributors’ sales force known as promotional consultants. The promotional consultants
are the independent contractors.
Some of the legislation presented last year would eliminate the “safe harbor” provision of tax law, known as “Section
530,” that recognizes the long-standing industry practice as a basis for classification as an independent contractor.
In the promotional products industry, salespeople willingly and intentionally opt to be independent contractors
because they wish to be their own bosses, want to manage their own time and desire the independence that their
sales positions afford them. In fact, any promotional consultant who is an independent contractor is a sole proprietor
or principal of his or her own company for those very reasons.
Preserve “Section 530” and allow promotional products professionals to continue to run their own businesses without
undue or unnecessary interference.
3. Tax Rates And Promotional Products Businesses
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (TRUIRJCA), Public Law
111-312, extended the tax relief provided by the Economic Growth and Tax Relief Reconciliation Act of 2001
(EGTRRA) for two years. Under EGTRRA the top individual marginal income tax rate was reduced to 35 percent.
It will return to its pre-EGTRRA level of 39.6 percent in 2013.
Under the current structure, married individuals filing joint returns for 2012 tax year, if their income is:
• Not over $17,400, they will pay 10 percent of the taxable income;
• Over $17,400 but not over $70,700 they will pay $1,740 plus 15 percent of the excess over $17,500;
• Over $70,700 but not over $142,700 they will pay $9,735 plus 25 percent of the excess over $70,700;
• Over $142,700 but not over $217,450 they will pay $27,735 plus 28 percent of the excess over $142,700;
• Over $217,450 but not over $388,350 they will pay $48,665 plus 33 percent of the excess over $217,450;
• Over $388,350 they will pay $109,229 plus 35 percent of the excess over $388,350
Sole proprietors, partners and S Corporation shareholders pay taxes on their business income on the personal rate
schedule. The promotional products industry is dominated by businesses organized as sole proprietorship,
partnerships and S Corporations. While statistics cited in debates about the impact of tax rate cuts or increases
generally rely on the number of taxpayers at certain taxable income levels compared to the aggregate number of
small businesses, it is relevant to look at the number of pass-through entities that have gross receipts of $250,000
and more as businesses that are concerned about the top marginal rate.
Not included in this discussion is the impact of the Alternative Minimum Tax (AMT). On the C corporation side, there
is an exemption for corporations with gross receipts of less than $7.5 million. On the individual side, the thresholds
are much lower. There was a “patch” for tax years 2010 and 2011 that increased the income levels at which the tax
was applied. In 2012, the exemption amounts revert to $33,750 (individuals) and $45,000 (married filing jointly).
Do not let the top individual marginal rate increase at the end of the year and extend the AMT patch.
4. Promotional Products And The 21st Century Postal Service Act Of 2011
This legislation presents the best opportunity to put the Postal Service on a fresh track for financial viability. The
Postal Service continues to provide a vital service to the nation but it will not survive let alone thrive unless it has the
tools to modernize and restructure.
Many promotional products are delivered via the mail. Together, promotional products and mail delivery provide a
cost effective way for businesses, especially small businesses, to deliver their message to their potential customers.
Do support and vote in favor of the 21st Century Postal Service Act of 2011.
PPAI is asking the promotional products industry to ‘Protect The Industry’ and ‘Keep Promotional Products
Working’ by contacting their members of Congress during L.E.A.D., March 7-8.
How-To: Take Action
Join PPAI L.E.A.D. And Write A Member Of Congress.
Ask them to keep the unique needs, challenges and interests of the promotional products industry in mind
when considering legislation.
Contact Members Of Congress And Address The Issues.
Ask them to watch for the possible introduction of any new legislation that would curtail the use of
independent contractors, impact tax rates and the 21st Century Postal Service Act Of 2011.
Follow the event's success with Twitter at #PPAILEAD. Join in the conversation—on Twitter.
Learn how to advocate for the industry.
About PPAI L.E.A.D.
The annual L.E.A.D., the Legislative, Education and Action Day is organized to allow promotional products
professionals the chance to educate Congress on industry-critical issues as well as the power, impact and job-
generating value of promotional products. In addition to this federal initiative, PPAI provides members law alerts and
the necessary tools and strategies for successful meetings with local government as well. To learn more about
PPAI’s government relations efforts, visit www.ppailaw.org.
Since 1903, the Promotional Products Association International, a not-for-profit, has been the standard-setting
international trade association for the promotional products industry. PPAI offers education, tradeshows, business
products and services, mentoring, technology and legislative support to its members. Today, PPAI serves more than
10,000 global member companies who lead the $16.5 billion industry. The multi-billion-dollar industry includes
wearables, writing instruments, calendars, drinkware and many other items, usually imprinted with a company’s
name, logo or message. PPAI created and maintains the UPIC (Universal Promotional Identification Code), the
industry’s only free identification system and universal company database. For information regarding PPAI or to learn
more about the proven power of promotional products (including research and case studies), visit the PPAI website
Editor’s Note: PPAI L.E.A.D. Fact Sheet