Retail

Proposed legislation would tax online sales

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A trade association for the retail industry supports proposed legislation that would give states the authority to require online retailers that sell products in their state to collect sales taxes.

The Retail Industry Leaders Association (RILA) says the Remote Transaction Parity Act (RTPA) would “end special treatment for online-only retailers.” The bill was introduced in the U.S. House of Representatives by U.S. Rep. Jason Chaffetz of Utah, who chairs the House Oversight and Government Reform Committee, on June 15, 2015.

“Main Street retailers have long maintained that requiring some businesses to collect taxes while giving others a free pass amounts to little more than a government subsidy,” says Jennifer Safavian, RILA’s executive vice president for government affairs.

“Online sellers no longer need special treatment—it’s time for Congress to close the online loophole and restore basic free market competition for retailers across the country. 

“Retailers aren’t asking for handouts or carve outs from Congress, we just want everyone to play by the same rules. We’re open to any solution that provides clarity and fairness for both retailers and consumers—and that means no consumer should be paying a tax rate where they don’t live and vote,” says Safavian.

RTPA would modernize current law, according to Rep. Chaffetz. “A broad coalition of large and small businesses, online and brick-and-mortar retailers, and state and local government leaders asked Congress to modernize our nation's outdated sales tax collection framework," he says in a press release posted on his Congressional website.

"The current tax loophole skews the free market. It allows businesses that employ fewer people and contribute to the economies of fewer states to avoid collecting sales taxes. This not only forces more brick-and-mortar stores to close their doors and lay off their employees, but also requires consumers to shoulder the burden and liability of the sales tax themselves - taxes that the consumer is by current law required to compute and pay as a part of their yearly taxes. The RTPA would close this loophole in a way that is generous to small remote sellers and puts our neighborhood retailers on a level playing field - without completely changing our current state sales and use tax structure."

To read more of Rep. Chaffetz's comments, see his website.

The bill, now known as H.R. 2775, was referred to the House Committee on the Judiciary.

Click here to read the full text of the bill.

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