The pursuit of a level playing field between Main Street retailers and their
online competitors as it relates to sales tax collection will be among the
issues addressed today in a hearing before the Senate Finance Committee.
A pre-internet loophole
prevents states from enforcing their sales tax collection laws when purchases
are made online. Consequently, while local retailers collect and remit sales
taxes on purchases made in their stores, their out-of-state online competitors
do not. This results in a perceived price advantage of between 6 percent and 10
“We welcome the
Committee’s interest in this issue and correcting this fundamental
unfairness,” said Katherine Lugar, executive vice president for public
affairs. “Congress must end the practice of government picking winners
and losers and let states enforce their own laws.”
introduced last year in the Senate would provide states with the tools to apply
equal treatment of the collection of sales taxes on remote sellers while
minimizing administrative burdens and costs for remote sellers to collect and
“A sale is a sale
is a sale. Whether it takes place online or at a local business, the same rules
should apply online that apply on Main Street,” said Lugar.
“Today’s hearing provides the opportunity to showcase the broad
bipartisan support that exists to close this loophole and level the playing
field for all retailers.”
The Marketplace Fairness
Act, S. 1832 was introduced by Senators Dick Durbin (D-IL), Mike Enzi (R-WY) and
Lamar Alexander (R-TN).
The hearing titled Tax
Reform: What It Means for State and Local Tax and Fiscal Policy, is scheduled to
begin at 10a.
RILA submitted hearing
testimony which can be viewed here.
RILA is the trade
association of the world’s largest and most innovative retail companies. RILA
members include more than 200 retailers, product manufacturers, and service
suppliers, which together account for more than $1.5 trillion in annual sales,
millions of American jobs and more than 100,000 stores, manufacturing facilities
and distribution centers domestically and abroad.