The Retail Industry Leaders Association (RILA) issued the following statement reacting to an announcement from the state of Alabama Department of Revenue that online retailer Newegg is challenging the state’s authority to require out-of-state retailers to collect and remit the sales tax on purchases made by Alabama residents.
Joe Rinzel, senior vice president for government affairs, said the case was the result of years of inaction in the House of Representatives on legislation to close the online sales tax loophole. The Alabama case is similar to a lawsuit filed by the state of South Dakota six weeks ago.
“Once again we are witnessing legal action as governors and state legislatures have grown impatient waiting for Congress to close the online loophole. The misguided policy of allowing online-only retailers to avoid sales tax collection has led to thousands of Main Street businesses closing their doors for good; and with them have gone thousands of local jobs, billions in payroll, property and sales tax revenue, and community involvement that is impossible to put a price tag on.
“Retailers have worked tirelessly for over a decade to close the online loophole and restore free market competition. We would prefer a legislative solution that guarantees small business protections and other simplifications over a legal challenge to Quill. However, given continued inaction by the House of Representatives, it’s become increasingly likely that the Supreme Court will re-examine Quill before Congress acts to address this issue. Absent real progress on a legislative solution, we support the efforts of states like Alabama and South Dakota to pursue a legal remedy.
“There is no longer an excuse to give online conglomerates special tax treatment over local businesses. One way or another, government must take its thumb off the scale and give all retailers the chance to compete in a free market.”
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.