Retailers oppose customs bill over lack of online sales tax provisions

Retailers are urging congressional lawmakers to reject a customs enforcement bill unless an online sales tax provision is added.

The National Retail Federation (NRF) said Thursday that online sellers have a distinct advantage over brick-and-mortar stores and changes must be made to ensure the same tax policy is applied across all merchants — whether local or on the Internet.

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“As more and more Main Street retailers close their doors because they cannot compete, it is time for Congress to remove the sales tax advantage for Internet sellers that is harming our communities,” said David French, NRF's senior vice president in a letter sent to Congress on Thursday.

“We need a level playing field so retailers can compete without the government advantaging one sector of the industry over the other," French said.

Retailers had hoped to use the customs measure as a vehicle for the sales tax bill, which has been in the works for more than a decade. 

French said the need for its passage is becoming more urgent as shopping shifts to the Internet. A recent NRF survey that found more people shopped online than in stores during the Thanksgiving weekend.

Plus, the compromise measure includes another tax provision — long championed by Sen. Ron Wyden (Ore.), the top Democrat on the Senate Finance Committee — that would make permanent a federal ban on Internet access taxes, which is set to expire on Friday.

So retailers argue that there should be room to attach their tax proposal as well, even if it doesn't face a looming deadline. 

Meanwhile, the U.S. Chamber of Commerce and the National Association of Manufacturers issued key vote alerts in support of the long-awaited customs measure. 

The final House-Senate agreement on the customs bill, which was released on Wednesday, is scheduled for a House vote on Friday.