Think the debate on online sales tax only applies to online retailers? Think again.
From brick-and-mortar to multichannel to online pure plays, if you’re in retail, you need to know about three legislative proposals currently under consideration by Congress. Why? Because if passed, online sales tax collection changes will significantly impact your business, be it online or offline.
We live in the days of omnichannel retailing, where retailers strive to keep their brick-and-mortar roots while leveraging innovative digital technologies that improve the customer experience. But unlike most of their online counterparts, brick and mortar retailers must comply with 7,600 different state and local sales tax systems – creating two separates systems, one online and one offline which are blatantly uncompetitive and unfair.
But sales tax fairness is about more than fairness among retailers – it’s about protecting small businesses and local retail jobs that are crucial to America’s towns and cities. Should federal legislation pass on this issue, state and local governments would receive $24 billion in additional revenue to support essential services – like teachers, police officers, firefighters and ambulance crews.
It’s NRF’s view that businesses need a 21st century tax system that works with 21st century retail. And now is the time for Congress to act.
Click to view a side by side comparison of current legislative proposals
Recently, Congressional leaders have introduced three main legislative proposals that seek to establish a 21st century way of collecting sales tax online. NRF strongly supports these efforts as legislation would make it easier for states to require all retailers – online and catalogs – to collect sales tax in the same manner as local stores – which will benefit us all.
And consumers agree. According to a recent Purple Strategies poll, eight in 10 Americans think we need a clearer approach to sales tax collection. And, according to a recent WSJ.com readers poll, over 60% of Americans believe state sales tax should always apply to online sales.
Want to know more about current proposals before Congress? Be sure to visit our new Sales Tax Fairness headquarters on RetailMeansJobs.com. And let your representatives in Washington know you support sales tax fairness for all through a letter or through a tweet.
6 Comments
I admit that I have no clue as to how to implement an online sales tax plan that would be fair and equitable. But to continue to force brick and mortar retailers to compete with online sales automatically puts b&m retailers at a 8-10% disadvantage right out of the gate. But just like many states collect local city and county taxes and allocate them back to them, surely there is an easy solution to this problem. There are way too many tax dollars unfairly not being collected . Legislation needs to be passed before another Holiday season comes and goes and everybody loses!!
Yes we need fairness and equality in sales tax charges. Every local community is impacted by lost revenue by online non taxed sales. The loss of Brick & Mortar shops has already impacted the communities. As long as the “status quo” remains and people don’t support their local stores and pay the tax we will all dissapear just like the Dinasours, clean air, education, police protection and libraries. All these things are supported by local sales tax plus hundreds more. (well maybe not the Dinasours)! We are already at a disadvantages with foreign imports that are being labeled as “gifts” and the manipulation of foreign currencies. Millions in revenue being lost to other countries as they go up in the market world and the US is sinking. At least the sales tax for all is a start in the right direction.
Interestingly, the direct mail catalog industry managed to avoid collection of sales tax for decades claiming that it was too onerous a burden. Now the same computing power than enabled the Internet is making it simple to collect sales tax from any zip code.
So catalog merchants (even those without an eCommerce business) should be included in any legislation.
The feds have no business meddling in STATE tax matters!!! It’s up to the greedy States to enforce their Use Tax/Compensating Tax rules (or whatever they call their taxes on out of State purchases), not the out of State retailer. Look how Internet commerce has grown by leaps and bounds without Fed interference. Leave the net alone Feds!!!
Why is the state’s solution to always increase taxes? The answer is self-evident.
Online retail sales have flourished because in many cases it’s an improvement in the supply chain but also because of the tax issue. Said another way, the lack of sales tax for online retail has contributed to it’s dramatic success.
Why don’t we look at this and reduce the state sales taxes for brick and mortar stores rather than trying to find a way to increase tax for online transactions?
Frankly, I’m surprised that NRF supports this legislation and would be very interested to hear more about the thought that went into the issue.
What I’m curious about is how this will effect companies that are used to hire private people. Can these sales taxes effect Craigslist? I would imagine that would be impossible to regulate. How about companies like Swifto (http://bit.ly/rwVyyj) that only assist private people in hiring others?
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