Retail group involved in move to require sales tax of online merchants

CBA has joined the fight for legislation that will "level the playing field" for brick-and-mortar retailers competing with online booksellers.

The retailers' trade association is urging mSembers to contact their local representatives to support the Main Street Fairness Act, which would enable states to require online retailers to collect and pay sales taxes.

CBA has posted draft letters backing the proposal at a new Advocacy & Action page at its Web site, following a meeting in Washington, D.C., with other retail groups concerned about what they see as unfair competition.

The organization has contacted representatives, senators and media in Colorado—where it is headquartered—about the issue following Amazon.com's letting go of its affiliates in the state. Colorado has approved affiliate nexus legislation that would require sales tax from locally based representatives of out-of-state businesses.

CBA has also voiced opposition to a proposal in Tennessee, which would exempt Amazon.com from paying sales tax there even though it is building a distribution center in the state, said Riskey. The campaign featured a full-page ad in The Knoxville News Sentinel by The Alliance for Main Street Fairness.

Following the announcement that Borders was going into bankruptcy, Danny Diaz—spokesman for the alliance, a coalition of small businesses—said that the chain was "the latest casualty on main street as Amazon.com and other online-only retailers continue to exploit a loophole ... creating an unlevel playing field that is bringing brick-and-mortar stores to their knees."

In support of the campaign in his state, Link McGinnis, owner of Cedar Springs Christian Store in Knoxville, Tenn., told the newspaper that the business his parents had founded 34 years ago had been "growing strong until Amazon came on the scene."

Now the Internet retailer was his biggest competitor, and his store's staff had been cut from 100 to 65 in the last six years. "It's very much impacted our business," McGinnis said. "You need to level the playing field." 

CBA Executive Director Curtis Riskey was part of the Advocates for Independent Retail (AIR) summit in January, which also included leaders from independent toy, pet, flower, bicycle and hardware markets. "All of these retail channels have been affected by discriminatory and unfair taxation laws that give pricing advantage to out-of-state businesses," Riskey said.

Twenty-four states currently require sales tax from Internet—only retailers, Riskey said, and many others were considering similar legislation. "Taxes should be levied fairly," he said.

David Grogan—senior public policy analyst at the American Booksellers Association, which convened the AIR meeting—said the organization was "very pleased" to work with CBA on the issue, which was one of mutual interest.

"Working toward sales tax fairness is a key issue for our members," he said. "The goal is leveling the playing field, so that our member bookstores don't start the day off with 6% to 10% disadvantage—whatever the sales tax rate may be in a particular state—even before they open their stores. 

"Each year, the situation only gets worse as online sales grow, and as more and more people erroneously believe the Internet to be a haven for 'duty-free' shopping—most not knowing that they owe a use tax for out-of-state purchases," Grogan added.