That playing field has changed dramatically since 1992, when the Supreme Court’s Quill decision posited that remote sellers – such as Internet retailers – were not required to collect sales taxes for sales made to customers located in states where the seller did not have a physical presence. At the time of the decision, it was considered too difficult for remote sellers to collect and remit taxes to so many different jurisdictions.
That is no longer true. Technology exists today that allows online businesses of all sizes to quickly and efficiently calculate taxes due on sales. Despite these changes, one thing remains the same: When someone purchases an item from my jewelry store, I am required to add sales tax. However, if that same persons buys the same item from an online-only retailer, sales tax is not included. This troubling and inequitable disparity exists because online-only stores exploit a 20-year-old loophole in our sales tax laws, allowing these online-only retailers to undercut local businesses like mine. As a result of this sales tax loophole, prices online are artificially lowered and brick-and-mortar retailers lose out. I have no problem with healthy, fair competition. But that just is not the case here. This inherent competitive advantage enjoyed and leveraged by online-only retailers must be eliminated.
Contrary to Mr. Bond's contention, Capitol Hill and private sector support for passage of e-fairness legislation have never been stronger. This is the very reason that he and his organization have taken to the digital pages of The Hill to propagate falsehoods about the purpose, intent and impact of this much-needed legislation. Ultimately, Mr. Bond and his cohorts would like to maintain a status quo that tips the scales in favor of online-only retailers over brick-and-mortar retailers like my jewelry store.
I commend the House and Senate authors of the Marketplace Equity and Marketplace Fairness Acts and look forward to the day on which Congress restores competitive balance to the retail marketplace.
Rosenheim is the owner & CEO of the Tiny Jewel Box in Washington, D.C.