The National Retail Federation is launching a two-month media blitz to drum up support for legislation that would require online retailers to collect sales taxes from out-of-state customers.
The group wants to close a loophole created by a 1992 Supreme Court decision that found that retailers do not have to collect sales taxes from customers in states where those companies have no store or other physical presence. The ruling applied to catalog retailers, and has since been exploited by online stores. Brick-and-mortar retailers and states say the loophole gives online firms an unfair advantage and is costing states billions in lost sales tax revenues.
NRF and other groups have rallied around a Senate bill that would allow states that meet certain tax-simplification standards to require online retailers to collect sales taxes from out-of-state customers.
"Our current sales tax system unfairly favors one set of retailers over another," NRF President and CEO Matthew Shay said in a statement Tuesday. "Congress is naming winners and losers by its failure to address this issue, and the brick-and-mortar retailers who create jobs across our country want action on this issue now."
The NRF's campaign will include print and online ads, an online petition, videos featuring small retailers who say they are harmed by the loophole, and events around the country to highlight the issue.
While the Senate bill, authored by Sens. Mike Enzi, R-Wyo., and Dick Durbin, D-Ill., has generated lots of attention, it's unlikely to pass in an election year.
Sen. Ben Cardin, D-Md., a Senate Finance Committee member who has co-sponsored the Enzi-Durbin bill, told Tech Daily Dose on Tuesday that pressure is building on Congress to address the issue at some point, saying states are facing "more and more hemorrhaging of revenues" from the loophole. Still, he added the legislation is unlikely to move on its own and will have to be included as part of a broader tax package.