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NRF Lobbies for Sales Tax Fairness

The National Retail Federation today launched a nationwide 60-day campaign to raise awareness among lawmakers and the public on how a loophole exempting online sales from sales tax is hurting local communities and job creation.

“Our current sales tax system unfairly favors one set of retailers over another,” NRF President and CEO Matthew Shay said. “Congress is naming winners and losers by its failure to address this issue, and the brick-and-mortar retailers who create jobs across our country want action on this issue now.”

“Over the next 60 days, NRF will engage and mobilize the retail industry in support of a national solution so every retailer – regardless of whether they sell their merchandise online, through the mail or in a store on Main Street – can compete on a level playing field,” Shay said. “This debate is about local retailers who make major contributions to their local communities being forced to operate in an unfair sales tax environment while out-of-state competitors are handed a huge advantage.”

NRF’s 60-day campaign will include:

•    Grassroots events as part of NRF’s Retail Means Jobs campaign, including stops in Chicago and Columbus, Ohio.
•    An online petition allowing merchants and consumers to have their voices heard.
•    A series of videos featuring small retailers talking about the competitive disadvantage they face.
•    Targeted print and online advertising in targeted states and congressional districts.
•    Grassroots mobilization of retailers from across the country through NRF's members and state retail associations.
•    An aggressive media relations campaign including editorial board meetings, interviews, and national placement of op-eds and letters to the editor.
•    Social media engagement to educate legislators and the public, including an infographic to visually depict the sales tax problem.

The sales tax loophole was created by a 1992 U.S. Supreme Court decision in Quill v. North Dakota that ruled that “remote sellers” - which include Internet, mail-order and “1-800” sellers on radio or television - can only be required to collect sales tax in states where they have a physical presence, such as their headquarters or a store or warehouse.

The court ruling means that most online sales go untaxed and has placed local retailers at a competitive price disadvantage. It also costs state and local governments an estimated $24 billion a year needed to pay the salaries of essential public workers like police officers, firefighters and teachers.
 
“The inability of state and local communities to collect sales tax on online purchases places policymakers under constant pressure to balance the books and puts brick-and-mortar retailers at a competitive disadvantage,” Shay said. “Retail is retail, be it online or in a store. All retailers should compete on a level playing field with the same set of sales tax rules. It is only fair.”

“In light of the Supreme Court ruling, this is a constitutional issue that requires a congressional solution; it's not a matter the states can resolve on their own,” Shay said. “Congress needs to pass legislation that is universal and covers all retailers yet provides flexibility that makes it practical for states to participate and businesses to comply.”

NRF represents retailers of all types and sizes from the United States and more than 45 countries. Retailers operate more than 3.6 million U.S. establishments that support one in four U.S. jobs

 

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