Marketplace Fairness Act

Online shopping has increased in popularity over the last several years, creating a new marketplace that promises promptness and ease with the purchase of items. However, it has also put traditional brick and mortar retailers at a disadvantage with its current tax and regulatory environments that don't require online retailers to collect tax at the time of a purchase.

The traditional retail outlets are important to communities. Mom-and-pop stores provide employment to residents, contribute to local causes and charities and keep communities running. The passing of the Marketplace Fairness Act would create balance between online and traditional retailers, providing fiscal relief for state and local governments by collecting sales taxes that are already legally owed on most retail purchases.

According to the National League of Cities, state and local governments had an estimated $23 billion loss of revenue in 2012 from the inability to require remote sellers to collect the legally imposed taxes on transactions. Last year, the Senate passed the Marketplace Fairness Act and legislation is being drafted in the House that would allow states and local governments the authority to require remote sellers to collect and remit sales taxes.

An article from Councilmember Joanne Osborne, Goodyear City Council

Since the start of our nation, our cities, towns and states have had retailers lining their respective "Main Streets." The owners of these stores have been a part of their community by infusing money into the place they live, work and play. These business owners also contribute by donating money to charities, schools and churches, helping the environment, taking leadership roles on boards and commissions, and being elected by fellow citizens. These small business owners, like me, know that when their community prospers they do, too.

In the last decade, these same small business owners have had to endure many external changes. Not only do they have healthy competition amongst their own brick and mortar stores, but they have also dealt with the new technologies and convenience of shopping online. There is nothing wrong with competition, we work harder and better to make our claim, we have also been working through a tough economy and devastating recession. We have struggled through regulations, tax systems and increasing costs that are out of our control, but this is not all done on a level playing field.

The retail industry has had many changes and the strong businesses have changed their ways and business models to keep with the times and stay relevant. Just a month ago, our store lost a large diamond sale to the Internet. When we know this is occurring, we will do our best to keep the client, offering high-quality customer service and looking for ways to work with the customer's purchase. We can also ask customers, "Do you need an appraisal, can we set the stone for you, or does the ring need to be sized?" But, at the end of the day, there is something that we cannot compete with and that is the sales tax we have to charge in our store, which most Internet-based retailers do not.

Recently, I flew to Washington, D.C. along with a few other local business owners, to speak with our elected Senate and Congressional Leaders. We let them know that, with the decade-old technologies of purchasing, we have changed our ways of doing business, that our state has changed their tax system to allow for incoming Internet sales tax. It is time for our Federal Government to change the tax system. I have stood up on this issue with our elected leaders for more than three years, and our government needs to do their job.

Internet sales tax is not a new tax. A Shoe is a shoe, is a shoe - whether that shoe is purchased in a store on Main Street, through a mail-order catalog or online - that shoe is a taxable item. Last year, the U.S. Senate the Marketplace Fairness Act that ensures items are taxed equitably, no matter how they are purchased. I strongly encourage the House to follow the Senate's lead on this issue so that we can guarantee an even-playing field for all business owners.

Lastly, please support your local stores. Shop with that mom-and-pop business who you know dedicates their lives to being a part of their community - it has been said that for every dollar spent locally, 68 to 72 cents goes back to that community.

League of Arizona Cities and Towns
1820 W. Washington St.
Phoenix, AZ  85007
Phone: 602-258-5786
Fax: 602-253-3874

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