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Press Release

One Year Later, Local Retailers Are Still Waiting On Congress To Restore Marketplace Fairness

The Time For E-Fairness Legislation Is Now, Says Alliance for Main Street Fairness

PR Newswire

WASHINGTON, May 5, 2014 /PRNewswire/ -- May 6th marks the one year anniversary since the U.S. Senate voted overwhelming and on a bipartisan basis to restore marketplace fairness and close the online sales tax loophole that's killing local retailers across the country. The Marketplace Fairness Act was supported by 69 senators and endorsed by small businesses, many conservative thought leaders and America's governors.

In 1992, the Supreme Court granted Congress the authority to deal with the future growth of out-of-state sales. At the time, online shopping was non-existent, but the loophole created by the Supreme Court would later place small brick-and-mortar retailers at a huge competitive disadvantage. Today, online-only retailers have experienced exponential growth in part due to the artificial price advantage they have by not collecting state sales tax like their brick-and-mortar counterparts.  Last year's Senate action sought to end this outdated government policy.

"Last year's bipartisan vote on e-fairness legislation was one of the few bright spots for the small business community to come out of Washington," said Melissa Palmer, Owner of Chocolatepaper in Roanoke, VA. "Closing the online sales tax loophole ensures the government doesn't pick winners and losers in the marketplace and makes all retailers, online or on Main Street, compete by the same rules. The Senate has acted, and we need the House to follow suit." 

In March, the House Judiciary Committee held a hearing to explore proposals to close the online sales tax loophole and pass e-fairness legislation. The overwhelming feeling by nearly every member of the committee was that small businesses are at a disadvantage and the problem is only going to get worse. Chairman Bob Goodlatte tasked Utah Representative Jason Chaffetz to craft e-fairness legislation that could gain the support of the U.S. House of Representatives. Representative Chaffetz recently told Bloomberg Government that he was "wildly optimistic" they could craft a solution that could become law this year and that they have "made more progress in the last 12 weeks than we have in the last 24 months" on this issue.

"Small businesses have patiently been waiting for the House of Representatives to move forward on e-fairness legislation since last year," said Jason Lang, Owner of Lone Peak Pharmacy in Draper, UT. "Representative Chaffetz's comments give me and my business hope that there is light at the end of the tunnel and that Congress will act this year. All I want is a free market, free of government interference and a level playing field where I can compete based on price and customer service, not outdated government policy."

"It no longer makes sense that 20th century laws govern 21st century commerce," said Rex Solomon, President of Houston Jewelry in Houston, TX. "The government should not be in the businesses of picking the success of one business over another. I will compete on price and service, but I can't compete against a retailer that is being subsidized by the federal government. It's time for government to take its thumb off the scale."

Last year, economist Arthur B. Laffer released a study, Pro-Growth Tax Reform and E-Fairness, which outlined how governors and state legislator could implement federal e-fairness and create a boon for our economy. Giving states the flexibility to implement e-fairness while cutting other burdensome taxes would result in 1.5 million jobs nationwide over the next ten year. States are not waiting for Congress to act, sending a clear message on how they would govern under e-fairness legislation. Wisconsin, Utah, Ohio and Idaho have enacted laws that would reduce income taxes once e-fairness is the law of the land. At least 12 other states are considering similar measures.


SOURCE Alliance for Main Street Fairness

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