The National Retail Federation recently asked a House committee to reject a bill that would block states from requiring that online sellers collect sales tax, saying the measure is the reverse of what Congress should be doing.
“As online sales become a larger percentage of total retail sales, it is imperative that policymakers recognize that … government should not favor remote sales over sales made in a bricks-and-mortar stores,” said David French, NRF senior vice president of government relations. “H.R. 2887 would exacerbate the current discrimination against local bricks-and-mortar retailers and lead to a further decline of Main Street retailers. H.R. 2887 goes in the opposite direction of fairness.”
French’s comments came in a letter sent to members of the House Judiciary Committee, which is holding a subcommittee hearing on the No Regulation Without Representation Act, sponsored by Representative James Sensenbrenner (R-Wis.).
The Sensenbrenner bill would bar states from requiring that out-of-state online sellers collect sales tax on sales made to their residents. The bill would effectively write into law a 1992 U.S. Supreme Court ruling that said sellers can only be required to collect sales tax in states where they have a physical presence such as a store, office, or warehouse.
The measure is the opposite of a series of bills introduced in Congress over the past 15 years that would allow states to require online sellers to collect sales tax the same as local stores regardless of whether they have a physical presence. NRF urged that the committee hold a hearing on the current House version of those bills, the Remote Transactions Parity Act, sponsored by Representative Kristi Noem (R-S.D.).
A similar measure, the Marketplace Fairness Act, is pending in the Senate, where it passed in 2013 before stalling in the House. NRF has argued that online sellers who don’t collect sales tax have an unfair price advantage over local stores that do.
For more information, visit www.nrf.com.