Retail News Breaks Archives
Retail groups demand 'e-fairness' in sales tax
November 2nd, 2011
WASHINGTON – A host of retail groups, retailers and retail property firms have called on the Joint Select Committee on Deficit Reduction, known as the "Super Committee," to give states more leverage to collect sales taxes from Internet retailers and catalog merchants.
About 70 national and state retail organizations and more than 60 retailers and retail property companies have signed a letter to the Super Committee that urges lawmakers to eliminate a loophole that prohibits states from requiring remote sellers to collect sales and use taxes owed on purchases from out-of-state vendors.
The groups say the loophole gives online merchants and catalog retailers an unfair advantage over traditional brick-and-mortar retailers and that $23 billion in uncollected state sales taxes are currently due on Internet and catalog sales.
"At issue is a decades-old Supreme Court ruling, which was issued in 1992, before the pervasiveness of today's Internet commerce, and which prohibits states from requiring remote sellers to collect sales and use taxes owed on purchases from out-of-state vendors," the retail groups and companies stated in the letter, addressed to Super Committee co-chairs Sen. Patty Murray (D., Wash.) and Rep. Jeb Hensarling (R., Texas). "This loophole has created an uneven playing field for brick-and-mortar retail businesses that face a price disadvantage, has led to budget shortfalls for states as sales taxes go uncollected, and an undue burden on consumers who do not realize they owe the sales tax if it is not collected by the seller, leaving them to face penalties and increased scrutiny from state auditors.
"Main street retailers are jeopardized as a result of the insurmountable price disadvantage created by this government subsidy along with 15 million bricks-and-mortar retail jobs and one in 10 jobs related to shopping centers," the groups noted. "Recent data suggests that one in four jobs is directly or indirectly related to the retail sector."
The letter also pointed to federal "e-fairness" legislation that would give states the authority to manage their state tax law while closing the loophole, including the Marketplace Equity Act (H.R. 3179) and the Main Street Fairness Act House and Senate companion bills (H.R. 2701 and S. 1452).
"As you seek solutions to address the federal budget, any final product will undoubtedly have an impact on the states, which are likewise facing their own budget crises," the letter concluded. "Consistent with the goals of the Joint Select Committee on Deficit Reduction, Congress has an opportunity to help the states resolve their own budget shortfalls by enhancing states' rights over sales tax collection authority and in the process closing a loophole that will level the playing field for all merchants."
Retail organizations signing the letter included the Food Marketing Institute, International Council of Shopping Centers, National Association of Chain Drug Stores, National Retail Federation, Retail Industry Leaders Association and North American Retail Dealers Association. Retailers signing the letter included Barnes and Noble, Bed Bath and Beyond, Best Buy, Gap, Lowe's, JC Penney, Petco, Safeway, Sears Holdings, Target and Walmart.