The National Retail Federation has launched a nationwide 60-day campaign to raise awareness among lawmakers and the public on how a loophole exempting online sales from sales tax is hurting local communities and job creation.
“Our current sales tax system unfairly favors one set of retailers over another,” NRF president and CEO Matthew Shay said. “Over the next 60 days, NRF will engage and mobilize the retail industry in support of a national solution so every retailer – regardless of whether they sell their merchandise online, through the mail or in a store on Main Street – can compete on a level playing field.”
NRF said its 60-day campaign will include grassroots events as part of NRF’s current ‘Retail Means Jobs’ campaign; an online petition for merchants and consumers to sign; a series of videos featuring small retailers talking about the competitive disadvantage they face; targeted print and online ads in certain states or congressional districts; mobilization of retailers through NRF’s members and state retail associations; and aggressive media relations push including editorial board meetings, interviews, and national placement of op-eds and letters to the editor; and social media efforts to educate legislators and the public.
According to NRF, the sales tax loophole was created by a 1992 U.S. Supreme Court decision in Quill v. North Dakota that ruled that “remote sellers” – which include Internet, mail-order and “1-800” sellers on radio or television – can only be required to collect sales tax in states where they have a physical presence, such as their headquarters or a store or warehouse.
That ruling, the NRF claims, “means that most online sales go untaxed and has placed local retailers at a competitive price disadvantage. It also costs state and local governments an estimated $24 billion a year needed to pay the salaries of essential public workers like police officers, firefighters and teachers.”
“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,” Shay said. “In light of the Supreme Court ruling, this is a constitutional issue that requires a congressional solution, it’s not a matter the states can resolve on their own.”
