The Association of Washington Business (AWB) and a coalition of trade associations and retailers want Congress to pass legislation that addresses the current competitive imbalance caused by the so-called Internet tax loophole.
"Our goal is to create a level playing field between online-only and traditional retailers," Amber Carter, AWB director of tax policy,and others said in the letter. "With the rapid growth of shopping at home, by smartphone and by tablet, all retailers are motivated to respond even more quickly than ever to consumer demands. But when federal law is tilted to advantage one type of seller over another, the long-term competitive foundation is weakened."
In the Senate, a bipartisan group of senior Senators is co-sponsoring the Marketplace Fairness Act (S. 1832), and in the House, the Marketplace Equity Act (H.R. 3179) is co-sponsored by a bipartisan collection of over 40 Members. While not identical, both of these bills would empower state legislatures to require remote sellers to collect and remit sales taxes to the location where an online or catalogue sale is being completed. Importantly, no state could impose this obligation unless it adopted a simplified process for remote sellers, as well as an exemption for companies that conduct a limited amount of business online.
The coalition letter went on to say: Washington is home to a wide range of large and small retailers that operate locally and sell their goods to customers from across the country, employing thousands of people and supporting economic growth. The National Retail Federation estimates that the retail sector is directly responsible for over 600,000 jobs in our state and that the total employment impact (including a multiplier effect) is over 880,000 jobs -- nearly one in four jobs in the state of Washington.
The Washington Department of Revenue has projected that closing the Internet tax loophole would yield an estimated $170 million in the current biennium and over $480 million in the next biennium – not in new taxes, but merely by assuring that taxes already due are collected.
The House legislation by Rep. Steve Womack (R-AR) has a group of 44 cosponsors from both sides of the political aisle while the Senate bill sponsored by Mike Enzi (R-WY) and Dick Durbin (D-IL) has 13 signers--again from both parties. There are no Washington State members of Congress signed on the bill.
AWB is urging its members to contact our Congressional delegation urging them to pass this legislation this year.