WASHINGTON - Brick-and-mortar retailers and online sellers are using
the holiday shopping season to step up their lobbying on a bill that
would expand collection of billions of dollars in state sales taxes.
if you order something online or from your favorite catalog this
holiday season, your shipment might come with a plea to write Congress
to oppose the bill. Walk into your local jewelry store, and you might
hear the other side of the issue.
At least 156 companies, trade
groups and lobbying firms are seeking to influence Congress on the
Marketplace Fairness Act, according to lobbying disclosures filed with
the Secretary of the Senate. The bill would allow states to collect
sales taxes across state lines - even from companies located in other
Lining up in favor are governors, mayors, grocers,
Realtors and shopping centers - including retail giants like Sears,
Wal-Mart and Target. They argue they're put at a disadvantage because
they have to collect state sales taxes on every sale - while online
Catalog companies, direct marketers, cigar
makers, e-commerce companies like eBay, and Overstock.com, as well as
anti-tax groups are lobbying against the bill. They argue that
collecting sales tax for more than 9,000 jurisdictions is overly
complicated, and opens them up to costly audits from 45 state tax
The National Conference of State Legislatures
estimates that states lost $23 billion in uncollected sales tax revenue
from out-of-state sales last year.
The Senate version of the bill -
with an exemption for businesses with less than $1 million in annual
sales - passed in May, 69-27. The House Judiciary Committee has not yet
held hearings. So why the attention to it now?
"One of the reasons
you see all this activity going on in the Christmas season is that the
holidays are critically important for retailers," said David French, top
lobbyist for the National Retail Federation. "We're afraid that if
another holiday season goes by without Congress addressing this, we
won't see some of these stores by next Christmas."
It's also the
time of year when retailers most often have contact with their
customers. A group calling itself the True Simplification of Taxation
Coalition - made up of catalog, direct mail and online retailers - is
including literature about the bill with each order shipped, along with a
postcard to send to the House Judiciary Committee.
"This has to
be done in a way that doesn't put us out of business," said Hamilton
Davison, president of the American Catalog Mailers Association. "It's
not the tax, it's the cost and complexity of compliance, and the
confusion for our customers."
Traditional retailers are also
stepping up their efforts. Last week, a coalition of retailers, called
the Alliance for Main Street Fairness, sent a letter to House Judiciary
Committee Chairman Bob Goodlatte urging him to support the bill.
believe that congressman Goodlatte is fighting for us, but we're just
trying to put the fire in his belly," said Jane Johnson, a jeweler and
City Council member in Salem, Va., in Goodlatte's district. She
complains that she must collect a 5.3% markup that Internet retailers
don't - on top of the cost of maintaining a storefront and contributing
$16,000 a year to local charities.
The campaign is highlighting
mom-and-pop stores in districts represented by members of the committee.
But Joshua Baca of DDC Advocacy, the Washington political strategy firm
coordinating the campaign, didn't deny that retail giants like Wal-Mart
are also footing the bill for the Main Street lobbying effort. "The
great thing about e-fairness is that this is a good opportunity for all
brick-and-mortar retailers, big and small, to band together to support
this," he said.
Follow @gregorykorte on Twitter