Retailers pay among this highest effective tax rates of any industry. Because of their operating model and footprint, most brick-and-mortar retailers cannot benefit from the deductions, credits and other tools that drive tax rates downwards. Every point the rate goes up increases the tax retailers pay and directly impacts their ability to compete and to invest in employees, innovation, and communities.
Many brick-and-mortar retailers have an effective tax rate of nearly 25% making it among the highest effective tax rates of any industry, particularly relative to competitors whose rates can be in the single digits.
Before any rate increase is considered to fund other policy priorities, Congress and the Biden-Harris Administration must ensure a minimum tax is enacted so all profitable companies are contributing, and all legally owed taxes are collected.
Retailers also support additional IRS funding to address tax evasion and collect tax revenue that is legally owed but not collected. According to the IRS, tax evasion in the U.S. may total $1 trillion a year—a massive increase from the $441 billion estimate from a decade ago.
Retailers should not pay any additional taxes while many companies pay little or no taxes and hundreds of billions of dollars remain uncollected.
Retail Works for All of Us