New Congressional Bill Tackles Sales Tax Reform

taxfairnessSales tax reform may have new life, as a new bill has been introduced in the House of Representatives that would level the playing field between brick-and-mortar stores and on-line sellers related to sales tax collection.

Utah Representative Jason Chaffetz (R-UT) introduced the Remote Transaction Parity Act of 2015, HR 2775, in mid-June. He is seeking Congressional co-sponsors as well as overall support. His move is considered to be significant because he is a conservative Republican who realizes that this is not a new tax, but instead a fairness issue related to small business. As of last week, he had 22 Republican and 18 Democrat co-sponsors. The goal is at least 10 more co-sponsors so the House leadership will move on the bill.

Bicycle dealers are urged to contact their members of Congress asking them to both sign on as co-sponsors and support the legislation to finally put an end to a seriously flawed sales tax system that requires retailers with physical stores to collect sales taxes (in states where it is required) while many on-line sellers do not.

Retailers from many industries with brick-and-mortar retailers attended a recent lobbying event in Washington in support. The event was organized by the Alliance for Main Street Fairness and had participants from the bicycle retail industry (Jeff Koenig), audio, sewing machines, children’s books, auto off-road parts, children’s bedding, running shoes, cameras, apparel, and motorcycle P&A.

All told of the hardships they face when Internet competitors are able to sell for less solely due to tax inequality. Tax-free Internet purchases are not the only reason these retailers are being challenged, but are a significant factor when some face up to a 10% price disadvantage due to unfair government tax policy.

This may be the last chance for awhile to repair the badly-broken mess sales tax situation, with the August Congressional recess looming, and election-year politics making movement unlikely in 2016.

The RTPA has several provisions that make it different from previously introduced Marketplace Fairness Act, and that may improve its chances of passage. It would give states the authority to enforce their existing sales tax laws on all transactions taking place within their borders—whether they happen online or on Main Street. It would require the collection of online sales taxes based on the destination the product would be shipped to, not the location of the online seller. That means no confusion for consumers, as nobody will pay a sales tax rate—online or in the store—where they don’t live or vote. RTPA also has several protections to safeguard small businesses, such as single point of collection, a uniform sales and use tax base, and free certified software solutions for sellers. RTPA also includes provisions like expanded audit protections to protect businesses from state regulatory overreach.

Bicycle retailers are urged to turn up the heat on this important issue by taking two simple steps. First, contact your member of Congress asking for their support. Second, call at least one organization at home (business club, Chamber, retailer’s association, etc.) and ask them to engage their membership network to do the same.

This simple letter from NBDA President James Moore was recently sent to his Congressman, and may serve as a template for your own letter:

Dear Congressman X,

As owner of a small business, I’m asking that your office co-sponsor HR 2775 Retail Transaction Parity Act. Every day I lose sales to internet sellers who are able to offer my customers an automatic 7% savings because they are not required to collect state sales tax as I have dutifully done for 30 years.

This is NOT a new tax but the requirement that an already legally required tax now be collected by the seller and remitted to the state (just as I do every month).

Please help small locally owned businesses by supporting this attempt to bring fairness to retail AND to capture already required (yet not collected) sales tax revenues for the state and local governments that depend on sales tax revenue for the services they provide.”

Respectfully,

For more on this important piece of legislation, visit the Alliance for Main Street Fairness website: http://www.standwithmainstreet.com and then take action today.

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