Business Groups Push for Online Sales Tax Reformby
A group of 26 retail, real estate, and other business groups recently appealed to House Judiciary Committee Chairman Robert Goodlatte (R-VA) to help move along proposed legislation that would allow states to collect online sales taxes.
The move would provide “clarity, uniformity, and parity to America’s merchants in today’s multichannel marketplace,” the group wrote last month in a letter to Goodlatte.
Noting that meetings about the topic have spanned three years, the group said it’s now time for the committee to consider H.R. 2775, the Remote Transactions Parity Act, and the not-yet-introduced Online Sales Simplification Act of 2015.
The Remote Transactions Parity Act was introduced in June 2015 by Rep. Jason Chaffetz (R-UT). According to Congress.gov, the bill is before the Judiciary Committee’s subcommittee on regulatory reform, commercial, and anti-trust law.
But the group’s interest in the Online Sales Simplification Act may face significant hurdles.
A discussion draft of the bill was circulated in January 2015, drawing the ire of the National Conference of State Legislatures (NCSL). In a letter that same month to then-House Speaker John Boehner (R-OH), the NCSL said Goodlatte’s draft violates the Constitution, imposes new taxes in nonsales tax states, and raises taxes on people who make purchases in higher sales tax states.
“We find this disingenuous proposal offensive and believe that it validates the unwillingness of the chairman to work in good faith with states to solve an ever-growing problem,” the NCSL stated.
Fast-forward more than a year, and the group’s recent letter to Goodlatte also makes clear a growing frustration, albeit in a different vein.
The lack of federal action increases the likelihood of measures by individual states, and in fact, the letter notes that Colorado and four other states require remote sellers to report information to consumers and state agencies for purchases that exceed $500.
“Not only does this law create an unnecessary administrative burden for remote sellers, but it also opens the door to serious privacy concerns for consumers,” the letter states.
Actions by individual states will lead to “disjointed and confusing remedies” and could “spur court action,” the group stated, adding that the state approach also prevents businesses from benefiting from simpler measures, such as uniform definitions or free tax software.
Members of the group behind the letter include the US Chamber of Commerce, International Council of Shopping Centers, National Retail Federation, National Association of Realtors, National Sporting Goods Association, and the Retail Industry Leaders Association.
Terry Sheridan is an award-winning journalist who has covered real estate, mortgage finance, health care, insurance, personal finance, and accounting and taxation issues for newspapers, magazines, and websites. A Chicago native and former South Florida resident, she now lives in New England.