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09 January 2014

Georgia Retail Association & Home Depot Signs Letter Urging Congress to Tax the Internet

Claiming that internet merchants put many local brick-and-mortar businesses at a competitive disadvantage, the Georgia Retail Association and Home Depot signed a letter to Congress urging federal lawmakers to pass the so-called Marketplace Fairness Act.

The letter to U.S. House Judiciary Committee Chairman Robert W. Goodlatte (R - Virginia) reads, "On behalf of the undersigned businesses and organizations, we are writing to start off the new year to urge immediate action on legislation to create marketplace fairness and make the 2013 holiday shopping season the last where Main Street businesses must compete at a government-created price disadvantage.

"Online shopping is popular with consumers and sellers alike," the letter reads. "The rapid growth of e-commerce should benefit online sellers as well as Main Street businesses that also sell online. However, the special treatment of remote sellers distorts this market and puts many local brick-and-mortar businesses at a competitive disadvantage. Legislation that levels the playing field while establishing important protections for businesses and consumers will ensure a healthy and competitive marketplace for decades to come."

The Marketplace Fairness Act (S. 743) was introduced in 2013, and allows state governments to collect sales and use taxes from online retailers, regardless of whether the retailer actually has a physical presence in the state. S.743 passed the U.S. Senate 6 May 2013, but stalled out in the House Judiciary Committee.

Opponents of the bill say the Marketplace Fairness Act would create an undue burden on internet merchants who would suddenly have to learn the tax laws in fifty different states in order to ensure that their customers were taxed appropriately.

Both the National Taxpayers Union and the Heritage Foundation have both voiced their opposition to taxing internet sales.

Below is the letter to Congress signed by the Georgia Retail Association and Home Depot, calling on the House of Representatives to pass the so-called Marketplace Fairness Act.


January 07, 2014

The Honorable Robert W. Goodlatte
Chairman
The Committee on the Judiciary
U.S. House of Representatives
Washington, DC 20515

Dear Chairman Goodlatte:

On behalf of the undersigned businesses and organizations, we are writing to start off the new year to urge immediate action on legislation to create marketplace fairness and make the 2013 holiday shopping season the last where Main Street businesses must compete at a government-created price disadvantage. The recent decision by the United States Supreme Court to decline granting certiorari for two cases that challenged a New York State statute only highlights the need for Congressional action. We applaud your "Basic Principles on Remote Sales Tax" principles released on September 18 and now urge you to turn these principles into legislative language and make this issue a top priority for the Judiciary Committee in 2014.

In the 1992 Quill Corp. v. North Dakota case, Justice John Paul Stevens wrote that "the underlying issue [of whether remote sellers should be required to collect sales taxes] is not only one that Congress may be better qualified to resolve, but also one that Congress has the ultimate power to resolve." More than twenty years later, the Court's recent refusal to revisit the legal question, ironically announced on Cyber Monday, reaffirms their 1992 direction that this is an issue that Congress must address.

Online shopping is popular with consumers and sellers alike. The rapid growth of e-commerce should benefit online sellers as well as Main Street businesses that also sell online. However, the special treatment of remote sellers distorts this market and puts many local brick-and-mortar businesses at a competitive disadvantage. IBM Digital Analytics Benchmark reports that online shopping this Cyber Monday leapt by 20.6 percent over last year. This incredible growth underscores the importance of Congressional action to ensure government tax policy does not disrupt basic free market competition.

Legislation that levels the playing field while establishing important protections for businesses and consumers will ensure a healthy and competitive marketplace for decades to come. We believe it is crucial for Congress to address this problem this year to protect millions of jobs. And, as Dr. Art Laffer's recent study found, when Congress fixes this problem it could help create 1.5 million new jobs and generate $563 billion in GDP growth in the next decade.

In closing, we appreciate the deliberative manner in which you have addressed the issue of how to modernize our sales tax collection system for the digital economy, and we urge you to make legislating on this issue a top priority for your Committee by moving a bill in early 2014. We stand ready to work with you and your staff to help translate your seven guiding principles into legislation that will provide meaningful simplifications for remote sellers and create a level playing field for all retailers. Thank you for your leadership on this and many important issues to our economy and country.