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Washington — Industry trade associations lauded congressional sponsors of an online sales tax measure that was re-introduced in the House and Senate today.
The bipartisan Marketplace Fairness Act would create a single, simplified platform for collecting state-level sales tax from online-only retailers. The bill would also provide e-tailers with free tax collection software, and exempt casual sellers and small start-ups.
Supporters of the measure include the Consumer Electronics Association (CEA), whose president/CEO Gary Shapiro described the legislation as vital. “We commend congressional leadership for their commitment to enact legislation that will require all retailers to collect owed sales taxes,” he said in a statement. “Today, brick-and-mortar retailers must collect owed sales and use taxes, while Internet retailers do so only in limited circumstances. As state budgets are hurting, forcing layoffs of essential public safety employees, now is the time to give states the ability to collect this much needed, and legally due, source of revenue.”
The Retail Industry Leaders Association (RILA), whose chain-store members includes Best Buy, Walmart, Sears Holdings, Target, Costco, Lowe’s, The Home Depot, Staples and T-Mobile, highlighted the need for a “level playing field” in an open letter to the bill’s sponsors.
“Main Street merchants compete on a playing field that has been skewed against them due to a loophole that allows online-only retailers to evade collecting state sales taxes,” wrote Katherine Lugar, RILA’s public affairs executive VP. “This practice has given these sellers a perceived price advantage of up to 10 percent, a competitive edge that results in government policy picking winners and losers in the free market.”
She noted that the bill’s state’s rights approach has the blessing of governors and state legislators throughout the country, in addition to the retailers who “invest locally by hiring employees, paying property taxes and contributing to their communities."
Also welcoming the bill’s re-introduction is the National Retail Federation (NRF), which said the act would close a loophole that has cost state and local governments some $24 billion in revenue.
“This bill grants states the ability to collect taxes that are already owed,” said NRF government relations senior VP David French. “The Marketplace Fairness Act reinforces free and fair competition in the marketplace, protects states’ rights, and brings much-needed simplification to the nation’s complex sales tax system. NRF has long-supported a federal solution to address the sales tax disparity that is flexible enough for states to implement and easy enough for small businesses to comply with.”