Retailers target Alibaba in online sales tax push

A coalition of retailers warn in a new ad that online retail giants could put them out of business unless Congress grants states more authority to collect sales taxes on Internet purchases. 

The new spot, produced by the Alliance for Main Street Fairness, begins with footage of when China’s largest online retailer, Alibaba, opened on the New York Stock Exchange in September.

The company’s initial public offering was “the biggest in Wall Street’s history,” a narrator says in the 30-second commercial set to air Sunday. “Now they’re coming to America.” 

“Thanks to the online sales tax loophole this Chinese company will decimate our local retailers. Unless Congress ends special tax treatment for Alibaba and other online giants, Main Street will never look the same,” the narrator states.

The ad marks the beginning of a six-figure campaign by the Alliance. The commercial will run on all of the Sunday political talk shows, and on cable television in the Washington, DC, Roanoke and Harrisonburg, Virginia, media markets, according to a spokesman.

The spot will also appear online. 

“Lots of politicians talk a good game, posting warm and fuzzy statements about Small Business Saturday on their Facebook pages, but we need Congress to do more than talk, we need them to act to support small businesses,” Alliance spokesman Joshua Baca said in a statement. “There will be fewer small businesses to choose from next year if Congress continues to delay and gives companies like Alibaba a tax advantage over local retailers." 

The online sales tax measure, dubbed the Marketplace Fairness Act, has run into stiff resistance on Capitol Hill from Republican lawmakers, including House Speaker John BoehnerJohn BoehnerRyan has little margin for error in Speaker vote Top Lobbyists 2016: Hired Guns The Hill's 12:30 Report MORE (Ohio), House Judiciary Chairman Bob GoodlatteBob GoodlatteThe hidden controversy over online shopping Report: Investor visa program mainly funds wealthy areas FTC proposes reforms to crack down on patent trolls MORE (Va.) and Sen. Ted CruzTed CruzCruz: Precedent exists for keeping Supreme Court short-staffed Commerce official will hit critics of domain name transition The media is rigging the election by reporting WikiLeaks emails MORE (Texas).

Earlier this month, a BoehnerJohn BoehnerRyan has little margin for error in Speaker vote Top Lobbyists 2016: Hired Guns The Hill's 12:30 Report MORE spokesman said the Speaker would not bring the online sales tax bill up for a vote before the end of the year, saying Goodlatte’s committee needed more time to study the issue.

Meanwhile, Cruz says the proposal favors corporate big-box retailers over smaller Internet-based outfits. 

Supporters, such as retail groups and a bipartisan group of lawmakers, believe it will equal the playing field between traditional storefronts and online retailers. States can only collect sales taxes from businesses that have a physical location inside their borders.

Backers hoped to attach the legislation to a less controversial bill that would extend a freeze on taxes on Internet access. They have admitted that it could be a major setback if the proposal doesn’t become law this year.

--This report was updated at 12:07 p.m.