Case Study: Leveling the Playing Field for Online Sales Tax   

The Opportunity  

For more than 20 years, a legal loophole allowed online-only sellers to avoid collecting state sales tax — giving them a 5–10% price advantage over brick-and-mortar retailers.  

A 2018 Supreme Court decision changed that — allowing states to require sales tax collection on online purchases for the first time in the digital era.  

Our Role  

We moved early and decisively to turn this legal shift into a nationwide policy solution.  

• Engaged members before the decision to align on strategy   
• Developed model legislation for states to adopt quickly  
• Partnered with state retail associations to drive adoption  

What We Advocated  

We focused on a simple, clear principle: all retailers should play by the same rules.  

Our approach centered on:  

• Level Playing Field: Equal tax treatment regardless of physical presence  
• Modern Policy: Updating tax systems to reflect how consumers shop today  
• Workable Standards: Following the South Dakota model to avoid undue burden  

We also pushed for:  

•  Economic nexus thresholds that are fair and enforceable  
•  Marketplace collection requirements to capture online platform sales  

The Outcome  

Our model has been adopted nationwide.  

Most states now require sales tax collection on online and marketplace sales — ending a decades-old competitive imbalance.  

Why It Matters  

• Eliminates a government-created pricing advantage  
• Restores fair competition across retail channels  
• Supports state and local communities through tax revenue  

The Impact  

This effort positioned the retail industry as a leader in modernizing tax policy — delivering a practical solution that works for businesses, consumers, and states alike.