In a free market, government shouldn’t pick winners and losers. But by excusing online retailers of the same obligations imposed on Main Street retailers, government is doing just that. This special treatment undermines competition and puts an unnecessary strain on the retailers on Main Street who create jobs and contribute significantly to communities.
Some argue that collecting sales tax online is too complicated and burdensome. This just isn’t true. Today Main Street retailers who also sell online are obligated to collect sales tax on all sales that occur on their websites. Several online-only retailers do so as well voluntarily. Others, such as Amazon.com, have spent millions fighting efforts to end this special treatment and won’t act until they are compelled to do so.
For years, retailers and states have sought to level this playing field and Congress has stood in the way. The Marketplace Fairness Act that was introduced last week by Senators Mike EnziMike EnziLawmakers reintroduce online sales tax bills Trump should work with Congress to block regulations on prepaid cards GOP wrestles with big question: What now? MORE (R-WY), Dick DurbinDick DurbinCongress should stand for consumers and repeal the Durbin Amendment Lawmakers reintroduce online sales tax bills Democrats exploring lawsuit against Trump MORE (D-IL), Lamar AlexanderLamar AlexanderLawmakers reintroduce online sales tax bills Overnight Healthcare: New GOP health bill on life support | ObamaCare insurer threatens to leave over subsidies Trump's FDA nominee clears key Senate committee MORE (R-TN), and Tim JohnsonTim JohnsonCourt ruling could be game changer for Dems in Nevada Bank lobbyists counting down to Shelby’s exit Former GOP senator endorses Clinton after Orlando shooting MORE (D-SD) would remove the federal government as an impediment to states, and give states the authority to level the playing field. This approach is similar to legislation introduced in the House last month by Reps. Steve WomackSteve WomackLawmakers reintroduce online sales tax bills Dems offer House resolution to force Trump's tax returns GOP blocks Dem effort to request Trump tax returns MORE (R-AR) and Jackie Speier (D-CA). These bills would lift the heavy thumb of the federal government off of the scale, and frees states to apply the sales tax collection rules evenly to ensure that competition, not government, is the force that determines success or failure.
This 20-year-old loophole makes no sense in today’s marketplace. Technology has dramatically simplified the task of collecting and remitting sales tax, and e-commerce is booming. At $165 billion in online sales, e-commerce is no longer in diapers and should not be coddled by the federal government.
The time has come to end the special treatment of online retailers and to give states the right to treat all retailers equally.
Sandy Kennedy is the President of the Retail Industry Leaders Association (RILA).