Letter: Close the online tax loophole
President, Colorado Retail Council
Executive director, Colorado Municipal League
Online retail giants have been challenging Colorado’s Main Street merchants on price for nearly a generation now, unfairly helped by an out-of-date U.S. Supreme Court ruling that leaves most online sales free of sales tax. Every year, this unfair competition makes it more difficult for these stores to continue to offer the jobs, personal service, support for local organizations and other contributions only a local business can offer to a community. And it takes away tax revenue needed to pay for vital services like police, firefighters and schools.
Fortunately, federal legislation has been introduced by Rep. Jason Chaffetz, R-Utah, a key member of Congress, which could finally shut down this loophole and allow states to require online sellers to collect sales tax in the same manner as local stores.
In Colorado, the General Assembly and Gov. Hickenlooper enacted legislation two years ago to put such a collection program in place once Congress acts.
The “Remote Transactions Parity Act” isn’t the first bill in Congress aimed at leveling the playing field between online sellers and local merchants. But after more than a dozen years of efforts, it may be the bill with the best chance of passage. It has broad and growing bipartisan support.
Among other refinements, it exempts more small online sellers; protects them against audits; and gives them free software that makes collecting sales tax as easy as calculating postage.
Main Street retailers in Colorado don’t mind fair and honest competition, but Washington shouldn’t continue to allow out-of-state “e-tailers” to have an unfair advantage by not collecting the same tax all other retailers collect.
We encourage Colorado’s congressional delegation to support Colorado merchants and Colorado jobs by co-sponsoring the House legislation and helping to get it signed into law before the end of the year. It’s time for a level playing field for our hometown stores.
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