“Suppose the Illinois legislature arbitrarily created a loophole that made purchases on Michigan Avenue tax-free while requiring all other Chicago retailers to collect the full sales tax,” Shay writes. “This is roughly equivalent to the tilted playing field faced by brick-and-mortar store owners who compete with online retailers.”
The op-ed explains how a 1992 U.S. Supreme Court ruling leaves most online sales untaxed even though the obstacles to taxing the sales cited by the court have long since been overcome by computer technology. Shay points out how that is unfair to local merchants, citing American Sale, a bricks-and-mortar retailer selling home recreation and holiday items at eight locations around Chicago, as an example.
“The taxes American Sale collects are being used to support the infrastructure—like roads and bridges—its online competitors are using to move their products to their customers,” Shay writes. “So not only does this loophole make it easier for the online retailers to make the sale, but local businesses like American Sale literally pay the price.”
As a solution, Shay calls for passage of the Main Street Fairness Act, legislation co-sponsored by Illinois Senator Richard Durbin that would give states the power to require all online sellers to collect the same as local stores.
Publication comes after Shay visited the Sun-Times for an editorial board meeting last month as part of a stop in Chicago during NRF’s Retail Means Jobs “road show.” NRF recently launched a new 60-day campaign for sales tax fairness, timed to coincide with a congressional hearing expected to be held this summer. The road show continues next week in Columbus.