This week, ILSR joined a coalition of 18 independent business trade associations, led by the American Booksellers Association (ABA), in urging the U.S. House of Representatives’ Committee on the Judiciary to hold a hearing on sales tax fairness. In the following letter, addressed to Chairman Bob Goodlatte (R-VA) and Ranking Member John Conyers (D-MI), the associations wrote that a “hearing would allow for constructive dialogue that would move us on the path to leveling the playing field for small businesses.”
In early May, the U.S. Senate passed a sales tax fairness bill, the Marketplace Fairness Act of 2013, by a wide margin. The bill has faced a much tougher battle in the House, and has not yet been scheduled for a hearing.
Opponents have tried to paint the bill as an effort by large retailers to hurt small businesses. The joint letter refutes this notion: “Opponents of sales tax fairness are asserting that it is being advocated by large chain retailers that want, in their words, ‘to crush’ small businesses with burdensome tax regulations. This argument could not be further from the truth. Our coalition of independent associations has been advocating on behalf of sales tax fairness since 1999. Small business owners were the first to feel the effects of this unlevel playing field, but, as e-commerce has grown, it is telling that it now affects retailers of all size.”
To help counter misinformation about the bill, the ABA has added a Fact Sheet to its Sales Tax page.
COALITION LETTER TO HOUSE JUDICIARY COMMITTEE
August 28, 2013
The Honorable Robert Goodlatte
Chairman, Committee on the Judiciary
U.S. House of Representatives
Washington, D.C. 20515
The Honorable John Conyers, Jr.
Ranking Member, Committee on the Judiciary
U.S. House of Representatives
Washington, D.C. 20515
Dear Chairman Goodlatte and Ranking Member Conyers:
We the undersigned, representing tens of thousands of independent business across the country, are writing to respectfully request a hearing regarding the current inequity in sales tax collection. The problems inherent in the current collection system significantly harm local businesses, fostering an inequity in the marketplace that we believe is not sustainable. A hearing would allow for constructive dialogue that would move us on the path to leveling the playing field for small businesses such as ours.
As it stands, large, online retailers enjoy a significant and unfair competitive advantage when they sell to consumers and are not required to collect and remit sales tax. This has resulted in an ever-increasing number of consumers eschewing local, small businesses in favor of online retailers to avoid paying the required sales tax. Compounding matters, with the advent of smart phones, some consumers will spend considerable time at their local stores, seeking recommendations for products from knowledgeable store staff, and, then, these customers will purchase the items on their smart phone to avoid the sales tax, often in the bricks-and-mortar store.
Many shoppers are not aware that they owe a use tax for any purchase they make in which sales tax is not collected. As a result, more states are attempting to recoup this use tax by adding a line on the state income tax return or, in worst-case scenarios, through onerous audits. It is far more efficient, and fairer to the consumer, to simply collect the mandated sales tax at the point of sale.
Opponents of sales tax fairness are asserting that it is being advocated by large chain retailers that want, in their words, “to crush” small businesses with burdensome tax regulations. This argument could not be further from the truth. Our coalition of independent associations has been advocating on behalf of sales tax fairness since 1999. Small business owners were the first to feel the effects of this unlevel playing field, but, as e-commerce has grown, it is telling that it now affects retailers of all size.
In late July, the Roanoke Times published an editorial in strong support of sales tax fairness, noting, “Business leaders in the Roanoke Valley and beyond have been clear and consistent in their support for the Marketplace Fairness Act…. Owners of local businesses noted that they are the victims of government-imposed tax discrimination under the current system. The merchants aren’t seeking an advantage for themselves, just fairer rules. They pointed to a new study that suggests fairer taxes would benefit the economy, generating an estimated 23,600 jobs in Virginia over the next 10 years and 1.5 million nationally.”
We urge the Judiciary Committee to schedule a hearing on sales tax fairness. Our members have dealt with the current inequity for more than a decade, and are now at a tipping point.
We welcome a comprehensive and thoughtful review of potential solutions to fix the current sales tax fairness problem through regular order in the Committee. We remain open to any ideas for strengthening or otherwise improving legislative proposals so long as the ultimate goal of leveling the playing field for all businesses and restoring federalism is achieved. We are also committed to protecting small businesses through simplification of state sales tax statutes and creating an environment of business certainty moving forward.
We would welcome a conversation with you regarding our support for sales tax fairness and why it is so important for small businesses across the country.
Thank you for your consideration.
American Booksellers Association
American Specialty Toy Retailing Association
Christian Booksellers Association
Great Lakes Independent Booksellers Association
Institute for Local Self-Reliance
Jewelers of America
Midwest Independent Booksellers Association
Mountains and Plains Independent Booksellers Association
National Retail Hobby Store Association
National School Supply & Equipment Association
New Atlantic Independent Booksellers Association
New England Independent Booksellers Association
Northern California Independent Booksellers Association
Pacific Northwest Booksellers Association
Southern California Independent Booksellers Association
Southern Independent Booksellers Alliance
The Independent Running Retailers Association
The Soccer Dealer Association