NRF welcomes release of online sales tax bill draft

29 Aug '16

2 min read

The National Retail Federation (NRF), an apex body of US retailers, has welcomed release of the online sales tax legislation draft by Robert Goodlatte, chairman of the House Judiciary Committee. The Online Sales Tax Simplification Act of 2016 makes states take steps which require online sellers to collect sales tax and breaks the deadlock on the issue.

Various forms of online sales tax legislation have been introduced in Congress over the past 15 years but none have won passage. NRF said action is needed to break Congress’ years-long deadlock on the issue.

“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 in a statement.

“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,” he added.

NRF looks 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should be allowed to compete based on how well they serve their customers, not according to tax policy determined by an out-of-date, quarter-century-old court decision,” the statement added.

Under a 1992 US Supreme Court ruling, online sellers can only be required to collect sales tax in states where they have a physical presence such as their headquarters, stores, offices or warehouses. 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. But NRF and other opponents say modern computer software makes that argument obsolete.

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