By Brandon Moseley
Alabama Political Reporter
The National Retail Federation issued a written statement urging the House Judiciary Committee to support H.R. 3179, the Marketplace Equity Act. The legislation would allow states to require internet retailers to charge state sales taxes.
NRF Senior Vice President David French said, “The National Retail Federation has long supported sales tax fairness legislation, and we are encouraged by the momentum that is building toward a solution. As retailing evolves and Internet sales become a more prominent portion of total retail sales, it is critical that Congress support pro-small business reform of a broken sales and use tax collection system.”
Vice President French said, “A federal solution to the Quill decision will allow states to broaden the base and apply their taxes equally to all items sold promoting an efficient sales tax system. This reform is necessary to reduce the uncertainty currently rampant as shown by state-by-state attempts to establish nexus for collection purposes artificially stifling the growth and expansion of small and medium sized business across the country.”
Alabama Governor Robert Bentley is a vocal proponent of making retailers pay Alabama sales taxes no matter where they operate. In a letter to Congress on April 19th Gov. Bentley wrote, “The bills will give Alabama the authority to collect sales taxes — as we currently do from local brick-and-mortar retailers — that are already owed from online retailers. Allowing us to effectively close this sales tax loophole would help both our state’s finances and our state’s small businesses.” “When local retailers lose business, jobs are threatened, communities that depend on the businesses suffer and our state’s economy pays the price,” the governor wrote.
The Alabama Retail Association said in a written statement in April that they support, “Federal legislation that would level the playing field for all retailers and close the online sales tax loophole. Online-only retailers, such as Amazon.com and Overstock.com, exploit a loophole in the tax code that pre-dates the Internet and allows them to forgo collecting sales tax at the point of purchase like their brick-and-mortar counterparts. This gives online retailers an average 8.33 percent and as much as a 10 percent price advantage over Alabama small businesses.”
Vice President French said, “Allowing states to capture remote sales tax revenue equitably regardless of a retailer’s business model is meaningful pro-small business reform of a broken collection system. This competitive disadvantage must be cured with Congressional action.”
French’s comments were made in written testimony submitted to the House Judiciary Committee for a hearing on Tuesday to consider H.R. 3179, the Marketplace Equity Act. H.R. 3179 was authored by Representatives Steve Womack (R) from Arkansas and Jackie Speier (D) from California. The bill would address the 1992 Supreme Court decision Quill v. North Dakota. In the Quill decision, the court said states can only require out-of-state sellers to collect sales tax only if they have a physical presence or nexus in the state.
Governor Bentley has estimated that making internet retailers charge sales taxes could generate $one billion over the next five years for the State of Alabama.