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'Sales tax on e-tailers may balance US apparel businesses'
31
May '13
As the US Senate has passed the Marketplace Fairness Act on e-commerce retailers earlier this month, the brick and mortar apparel retailers are expecting a relief from the increasing competition with online retailers since the act will balance the apparel business.
 
Currently, only companies with brick-and-mortar stores in the US have to pay online sales tax. However, retailers with physical presence would not immediately get “a level-playing field” with Internet retailers, as the bill would now be sent to the House of Representatives.
 
In a conversation with fibre2fashion, vice-president of American Apparel and Footwear Association (AAFA), Mr. Steve Lamar said, “The US apparel and footwear industry stretches across the brick and mortar as well as online realms, with an undeniably increasing shift to e-commerce. As this shift continues to accelerate, it is important that everyone is receiving the same taxation treatment—to do otherwise is to essentially pick winners and losers.”
 
“The Marketplace Fairness Act updates and simplifies state sales taxation processes. If a state agrees to streamline their sales taxation framework, apparel and footwear Internet retailers would collect the same sales tax as their brick-and-mortar counterparts, and everyone would be participating in the same level-playing field,” he mentions.
 
According to him, a small business exemption contained in the Act ensures that small-time Internet retailers of clothing and shoes with less than US$ 1million in annual revenue would not be affected by any collection requirements.
 
With the implementation of the Act, the new law would make online retailers like Amazon, eBay and others to pay sales tax, even in those states where they do not have offices or distribution centres, thus ensuring a level-playing field with normal retail stores that have to pay sales tax.
 

Fibre2fashion News Desk - India


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