As congress begins to tackle legislation that would create a unified national method for online retailers to collect sales tax on out-of-state sales, the National Retail Federation submitted written testimony ahead of today’s hearing by the House Judiciary Committee to support the measure. According to the NRF, the legislation would remove the price advantage that online retailers have over physical stores, an advantage the association says is “stifling” Main Street stores’ ability to compete.
“As retailing evolves and Internet sales become a more prominent portion of total retail sales, it is critical that Congress address the sales tax collection discrimination that exists between brick and mortar and remote retailers,” said NRF senior v-p for government relations David French. “Congress must resolve the Constitutional questions posed by the Quill decision in a fashion which promotes a level playing field between retail competitors.”
Three bills that would address the tax fairness issue – the Main Street Fairness Act, the Marketplace Equity Act and the Marketplace Fairness Act – are pending in Congress. French said collection authority is a priority, but requirements included in each bill for states to simplify their sales tax systems are also key to ensuring sales tax reform.
The ABA has long called for online retailers to collect sales tax and Amazon has given its support to efforts to create a national method to collect sales tax.
“Sales tax fairness requires all sellers, whether brick and mortar or remote, to collect sales taxes, but only after the states have simplified their collection requirements,” French said. “NRF urges the committee to enact sales tax collection reform that will level the playing field between brick and mortar and remote sellers by granting states the authority to collect sales taxes from all sellers regardless of their distribution method.”
