NRF urges US Congress to pass legislation that would require online, remote sellers to collect state and local sales taxes, to address 'sales tax collection discrimination' between brick-and-mortar, remote retailers
March 12, 2014
– The National Retail Federation today urged Congress to pass legislation that would require online and remote sellers to collect state and local sales taxes, telling a House committee that lawmakers should level the playing field between local retailers and out-of-state competitors.
“Members of the National Retail Federation believe that Congress must resolve the constitutional questions posed by the Quill decision in a fashion which promotes a level playing field between retail competitors,” NRF Senior Vice President David French said. “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.”
French told the House Judiciary Committee in a letter that legislation is needed to end the sales tax disparity. While Main Street merchants are required to collect state and local sales taxes on most items, many out-of-state sellers are not required to do so, giving them an unfair price and market advantage of as much as 10 percent. The committee is scheduled to hold a hearing on the issue today.
“Different retailers have different strategies for going to market, but one feature is beyond a retailer’s control: only some competitors are compelled by the government to collect sales taxes,” French said. “This situation is not created by the marketplace, but rather it is a disadvantage imposed by the current state of the law following the Quill decision, stifling retailers across the country.”
NRF urged the committee to consider online sales tax legislation, based on principles outlined last fall by Chairman Bob Goodlatte, R-Va., that recognizes compliance costs, eliminates the legal, statutory and market uncertainty created by the current patchwork of state laws and court decisions, and simplifies the collection process while minimizing the burdens placed on consumers, the Internet and commerce.
“NRF has long supported Congress granting states remote collection authority with required simplifications to ensure all retailers are not unduly burdened by collecting and remitting sales taxes,” French said. “We look forward to working with the committee on legislation to ensure effective and fair sales tax collection while relieving burdens placed on a growing sector of the economy.”
Under the U.S. Supreme Court’s 1992 Quill ruling, online retailers are required to collect sales tax only in states where they have a physical presence such as a headquarters, store, office or warehouse. Federal legislation passed in the Senate last year would provide states the ability to require sales tax collection.
NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.5 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF’s This is Retail campaign highlights the industry’s opportunities for life-long careers, how retailers strengthen communities, and the critical role that retail plays in driving innovation. www.nrf.com
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