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US Retailers Welcome Online Sales Tax Legislation

by Mike Godfrey, Tax-News.com, Washington

29 August 2016


Urging action to break "Congress's years-long deadlock" on sales tax issues surrounding online retailers, the US National Retail Federation (NRF) has welcomed the release of draft online sales tax legislation by House Judiciary Committee Chairman Robert Goodlatte (R - VA).

"We hope this move will bring the attention needed to get Congress to move forward in treating purchases made online the same as those made in local stores when it comes to sales tax collection," NRF Senior Vice President for Government Relations David French said. "With online shopping increasing every day, it's time for Congress to act. The price advantage held by online sellers when they don't have to collect sales tax has resulted in the shuttering of bricks-and-mortar retail stores in almost every community across the nation over the last few years. That cannot be allowed to continue."

"We look forward to working constructively with Chairman Goodlatte and Congress to ensure legislation is passed to achieve the level playing field for sales tax collection that is so desperately needed," French said. "Retailers should be allowed to compete based on how well they serve their customers, not according to tax policy determined by an out-of-date, quarter-century-old court decision."

Goodlatte released a draft version of the Online Sales Tax Simplification Act of 2016 on August 25, 2016. This would allow states that take certain steps to require online sellers to collect sales tax.

Various forms of online sales tax legislation have been introduced in Congress over the past 15 years but none has won passage. Under a 1992 US Supreme Court ruling (Quill Corp. v. North Dakota, 504 U.S. 298), online sellers can be required to collect sales tax only in states where they have a physical presence such as their headquarters, stores, offices, or warehouses.

Noting that the court held that sales tax laws are too complicated for a seller in one state to know how much tax to collect from a buyer in another state, the NRF said modern computer software makes that argument obsolete. It highlighted that Justice Anthony Kennedy said last year that the court made a mistake.

TAGS: court | tax | sales tax | law | legislation | United States | retail | Tax

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