The National Retail Federation has launched a nationwide, 60-day campaign to raise awareness about the effect of a law that allows online sales to go untaxed.
“Our current sales tax system unfairly favors one set of retailers over another,” says Matthew Shay, president and CEO of the NRF. “Congress is naming winners and losers by its failure to address this issue, and the brick-and-mortar retailers who create jobs across our country want action on this issue now.”
The sales tax campaign centers around a loophole derived from a 1992 U.S. Supreme Court decision in Quill v. North Dakota. The ruling states that all “remote sellers” are required to collect sales tax only in those states in which they have any sort of physical presence.
Most online purchases—such as those on Amazon and eBay—go untaxed, making them ultimately cheaper than the local retailer, NRF reports. Local and state governments also feel the pinch as less income is generated for public services.
“The inability of state and local communities to collect sales tax on online purchases places policymakers under constant pressure to balance the books, and puts brick-and-mortar retailers at a competitive disadvantage,” Shay says. “Retail is retail, be it online or in a store. All retailers should compete on a level playing field, with the same set of sales tax rules. It is only fair.”
The two-month campaign includes grassroots events, an online petition, a series of videos and ads, and media engagement aimed at educating legislators and the public.
The NRF wants the issue to be resolved at the congressional level, rather than state by state. Congress needs to pass universal legislation that covers all retailers while providing state flexibility, Shay says.
