The retail sector has long been willing to trade tax breaks for lower rates, in large part because the industry pays a higher effective rate than other sectors while receiving fewer tax incentives.
The association's letter cites a PricewaterhouseCoopers study it commissioned that found that the retail industry pays an effective tax rate roughly 10 percentage points higher than other major industries when including both state and federal rates. The study also found that retailers support the second most jobs among major U.S. industries.
“It makes no sense to tax the second largest employing sector in the country, or any sector for that matter, at a substantially higher rate that that levied on other industries,” Hughes wrote.
Still, some of the tax breaks that the RILA would put on the chopping block are popular. The U.S. Chamber of Commerce, for instance, said in a letter to the Ways and Means panel last week that it wanted to maintain incentives for research and development and for writing off investments.
Tax panels in the House and Senate are holding meetings to try to push the ball forward on reform.