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NRF Launches Sales Tax Campaign

The 60-day movement aims to close an online tax loophole.

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.

About the author

Sarah Brown
Sarah Brown is a freelance writer who writes about e-commerce and small businesses. She recently graduated from Chico State with a journalism degree and is also a budding online entrepreneur, having launched two Web businesses and her own line of handmade products. Opinions expressed here may not be shared by The Online Seller and/or its principals.

  • Droidgeneral

    I think it is fair but only if the companies like Ebay and Amazon are the ones collecting and paying each state and not putting it in the hands of the little guy. If you have your own e-commerce solution you should pay but if you use Ebay and or Amazon exclusively it should be they who collect and pay the taxes as they advertise themselves as the big store and sellers on those sites are really nothing more than warehouses and fulfillment services for the Giants

  • Brian

    If we’re going to start taxing online retailers the same as brick and mortars then perhaps we should start taxing companies like Walmart that get their products from China as doing that puts small business retailers at a competitive disadvantage to larger retailers.

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