May 7, 2013 (Arlington, Va.) — The National Association of Chain Drug Stores (NACDS) is praising the U.S. Senate for passing legislation to even the playing field among retailers by applying similar sales tax laws to online and brick-and-mortar retailers.
The Senate passed the Marketplace Fairness Act, S. 743, on Monday night by a vote of 69-27.
“This legislation would modernize sales tax policy to reflect the marketplace as it exists today,” said NACDS President and CEO Steven C. Anderson, IOM, CAE. “When it comes to updating this outdated policy, every day of inaction is another day of discrimination against brick-and-mortar retailers. NACDS commends the Senate for true leadership in recognizing a necessary change for fairness and fiscal responsibility.”
The measure would give states the ability to require retailers with more than $1 million in annual sales to collect state and local sales taxes for online purchases. Currently, the law requires an online retailer to collect sales tax only on products shipped to states in which the retailer has a physical presence, including a store or a distribution center.
The National Conference of State Legislators estimates that the current laws prevented states from collecting $23 billion in sales tax revenue.
“The law and its interpretation by the courts date back to the pre-Internet era,” Anderson said. “There is no way the Marketplace Fairness Act can be labeled a ‘new tax’ with a straight face. It is a long-overdue application of existing sales tax laws. The only thing new here is fairness.”
To become law, the Senate and House of Representatives would need to pass the legislation in identical form, and President Obama would need to sign it.