CEA Supports Online Tax Collection

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Arlington, Va. - The Consumer Electronics Association (CEA) has come out in favor of federal legislation that would encourage online-only retailers to collect and remit state and local taxes, thereby leveling the playing field for brick-and-mortar merchants.

 The trade group acknowledged that its new stance is a reversal of an older policy that supported a tax moratorium for e-tailers during the Internet's infancy, and still asks that any change in law not disproportionately hurt smaller Web-based companies.

"Although when the Internet was new we opposed efforts to require Internet retailers to collect sales tax in states where they did not maintain a physical presence, today we formally change our position as the landscape has radically changed," CEA president/CEO Gary Shapiro said in a statement.

"First, the Internet and Internet retailers no longer need any special exemptions to flourish. Second, the current system of collection and remittance can give online retailers that don't currently collect sales tax a four to 10 percent price advantage over local stores paying sales taxes and employing taxpaying Americans. Third, state and local governments are in deep financial trouble exacerbated by the present system of voluntary citizen reporting and payment of sales tax on Internet purchases."

By way of example, Shapiro cited CEA's home state of Virginia, where citizens voluntarily remitted only $81,704 in 2010.

"CEA believes that consistent with existing law regarding tax collection obligations, a unified national collection policy that applies regardless of whether a product is purchased online or in person will help ensure all retailers - big, small or online - operate fairly and competitively in the marketplace," he said. "We endorse a policy that ensures everyone operates under the same rules."


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