Legal Definitions - markup

The term "markup" has two distinct meanings, one in business and finance, and another in the legislative process.

1. In Business and Finance:

Markup refers to the amount added to the cost of a product or service to determine its selling price. This added amount is intended to cover operating expenses and generate profit for the seller.

• Example 1: Retail Clothing Store
  A small boutique purchases a new line of designer dresses from a wholesaler for $150 each. To cover their rent, staff salaries, marketing, and to make a profit, they decide to sell each dress for $300. The $150 difference between the cost ($150) and the selling price ($300) is the markup.
• Example 2: Software Development Service
  A software company estimates that the internal cost (including developer salaries, software licenses, and overhead) to create a custom mobile application for a client is $10,000. They then quote the client a price of $25,000 for the project. The $15,000 difference represents the company's markup, which allows them to sustain their operations and achieve profitability.

2. In the Legislative Process:

Markup refers to a formal session held by a legislative committee where members review, debate, amend, and finalize the text of a proposed bill. This process occurs before the bill is reported out of the committee for consideration by the full legislative body (e.g., the full House of Representatives or Senate).

• Example 1: Senate Committee on Health, Education, Labor, and Pensions
  The Senate HELP Committee convenes a markup session to discuss a proposed bill aimed at reforming student loan programs. During this session, committee members propose various amendments, such as changes to interest rates or repayment terms, debate their merits, and vote on which amendments to incorporate into the bill's final text before it is sent to the full Senate for a vote.
• Example 2: House Committee on the Judiciary
  The House Judiciary Committee holds a markup on a bill designed to update federal cybersecurity laws. Committee members review each section of the bill, suggest modifications to clarify definitions or expand enforcement powers, and ultimately vote to approve the revised version of the bill to be reported to the House floor.