Alliance for Main Street Fairness

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The Alliance for Main Street Fairness(AMSF) is a coalition of business owners and citizens from across the United States who want to level the playing field and fix antiquated tax laws so that businesses, whether online or traditional brick-and-mortar sellers, can compete fairly in the marketplace."

Federal legislation[edit]

In March 2014, the House Judiciary Committee, chaired by Congressman Bob Goodlatte (VA-6), held a hearing regarding the online sales tax issue. Members of the committee recognized that the loophole in regards to collecting sales taxes on online sales is an issue that needs to be dealt with. Chairman Goodlatte has exhibited his concerns with the Senate bill, (S. 1832) Marketplace Fairness Act, and will likely be introducing new legislation based off of principles he released in September 2013.

Preceding the hearing, over 1,000 businesses signed a letter to Chairman Goodlatte in support for a federal fix “to ensure fairness in today’s retail marketplace,”

State legislation[edit]

Arkansas[edit]

Arkansas became the fifth state to enact a law to require Internet retailers to collect sales tax if they do business with in-state affiliate web sites in 2011. Governor Mike Beebe, a Democrat, signed Senate Bill 738 into law imposing sales tax-collection responsibilities on online retailers that are referred visitors by affiliate web sites based in Arkansas and generate more than $10,000 a year in sales from Arkansas residents.

California[edit]

The Main Street PR campaign supported legislation introduced by Nancy Skinner in the state assembly that is now law that required out-of-state online sellers with affiliates in California to collect sales tax on purchases made by state residents. The affiliate provision was included in Assembly Bill 153 to ensure that only sellers with a California nexus are taxed, as required by federal law.[1] "This legislation will close the current loophole in tax law which has allowed out-of-state companies to avoid collecting California sales and use tax," stated Skinner.[2] Skinner estimated that AB153 could produce between $250 million and $500 million per year in new revenue. She and other supporters of the bill believe that the election of Jerry Brown to the governorship and support from retailers such as Barnes & Noble will help the measure become law.[3] Skinner pushed legislation to tax online sales that was approved in 2009 as part of the state budget. Gov. Arnold Schwarzenegger vetoed the legislation.[2]

In response to threats by Amazon.com to sever its relations with affiliates in California, Main Street said, "California cannot allow companies like Amazon to put a gun to the state’s head demanding special treatment. If Amazon chooses to damage their own business model and their relationships with California’s online community, that’s their choice. Other companies will gladly fill the void and work with California’s online affiliates. Many of Amazon’s brick-and-mortar competitors have online relationships with California affiliates and collect the sales tax, and they will undoubtedly expand that presence if Amazon makes the mistake of creating a vacuum."[4]

In July 2011 Amazon made good on its threats and terminated all of its California affiliates.[5]

Compromise with Amazon.com[edit]

In response to resistance from Amazon.com, other online retailers, and anti-tax groups the State of California agreed to delay of one year before requiring online retailers to begin collecting sales tax on sales to California addresses.[6] In return for the one-year delay from California Amazon.com says it will create 10,000 full-time jobs, 25,000 seasonal jobs, invest $500 million in various facilities in California over the next few years, and begin remitting sales taxes on orders shipped to California. Amazon is seeking "a lasting partnership with the state," said Amazon Vice President Paul Misener.

"Amazon.com has finally acknowledged that their government-sanctioned advantage is unfair by agreeing to collect sales taxes in California. Amazon had the chance to make the same commitment here in Arkansas, but instead chose to fire their Arkansas affiliate network," said Robert Coon, spokesperson for the Alliance for Main Street Fairness.

Governor Jerry Brown said, "This landmark legislation not only levels the playing field between online retailers and California’s brick-and-mortar businesses, it will also create tens of thousands of jobs and inject hundreds of millions of dollars back into critical services like education and public safety in future years."

Colorado[edit]

In response to HB 10-1193 passed in 2010 Amazon.com terminated its relationship with all affiliates located in Colorado. The bill originally sought to tax sales to Colorado residents by online retailers with Colorado affiliates. The bill was amended to remove all reference to affiliates in order to discourage Amazon from cutting ties with them. The final bill required large online retailers to either remit tax on sales to Colorado residents or provide information on Colorado customers to the state. In spite of this move Amazon still decided to terminate its Colorado affiliates.[7]

Florida[edit]

In an editorial supporting tax equity for online sales the St. Petersburg Times wrote, "The bookstore chain Borders did not cite Florida's outdated sales tax law last week when it announced it would shutter four of five Tampa Bay stores as it enters Chapter 11 bankruptcy proceedings. But the competitive disadvantage for the state's retailers that the Florida Legislature refuses to address is at least partially to blame. As long as Internet-only sellers such as Amazon.com can get away with not collecting state sales tax and effectively sell their products for at least 6 percent less, Florida merchants pay the price. It's past time for lawmakers to work toward a level playing field."

Illinois[edit]

In March 2011 Governor Pat Quinn signed the Main Street Fairness Act into law. The law seeks to expand the collection of sales taxes to items purchased online by Illinois residents. The law targets online retailers who have sales affiliates located in the state. Quinn said, "This law will put Illinois-based businesses on a level playing field, protect and create jobs and help us continue to grow in the global marketplace."[8]

Main Street praised Governor Quinn for signing this legislation. In a press release the group said, "In Illinois, small business retailers are the backbone of the state's economy and are vital components of the community, and they have been operating at a significant disadvantage as online-only retailers have exploited a decades-old loophole to gain an unfair and artificial advantage in the marketplace. By signing HB 3659, Quinn ensures that all businesses will compete on the same playing field, collecting the sales tax at the point of purchase whether they operate on the Internet or in Illinois' communities." [9]

Indiana[edit]

On 11 April 2011 the Alliance for Main Street Fairness held a press conference at the state house to call for tax fairness. In a statement the group said, "“We are here today to urge the Indiana General Assembly to pass legislation this year to level the unfair playing field between Hoosier-based retailers and Internet sellers. Retailers across the state welcome and thrive on fierce competition that exists in the free marketplace and today there is a significant disadvantage."

Kentucky[edit]

In an editorial The State criticized the incentives given to Amazon to build a distribution center in Lexington. They wrote that deal with Amazon created "...yet another exemption in our Swiss-cheese tax code, and surrender[ed] what little leverage we have to collect taxes on the fastest-growing segment of the retail sector — from which we derive the largest share of the revenue that runs state government. It’s only a small step from giving Amazon a five-year exemption from collecting the sales taxes from S.C. residents to giving that same break to WalMart, Target and all the other businesses that offer online shopping — as one Senate amendment actually proposed to do."[10]

New York[edit]

In 2008, New York State passed a law that would force online retailers to collect sales taxes on shipments to state residents.[11] Shortly after the law was signed, amazon.com filed a complaint in the New York Supreme Court objecting to the law.[11] The complaint wasn't based on whether in-state customers should pay tax, but upon the long-standing practice of it being the responsibility of the customer to report the sales tax (known as use tax in this case) and not that of the out-of-state businesses.[11] The lawsuit was tossed out of court in January 2009, when New York State Supreme Court Justice Eileen Bransten stated "there is no basis upon which Amazon can prevail."[12]

Ohio[edit]

A study released by the University of Cincinnati in October 2011 determined that Ohio's state government could increase tax revenue by at least $200 million per year if Congress were to require online retailers to collect and remit sales taxes. Ohio consumers who make online purchases already are already required to self-report and pay sales tax but compliance is rare. According to the study, even though more than 60 percent of households in the state made at least one purchase from an online retailer in 2010 less than 1 percent of Ohio state income tax returns included tax payments for such purchases.

Oklahoma[edit]

A study conducted by the University of Tennessee concluded that $156.3 million in state and local taxes will be lost in Oklahoma in 2012 because of unreported online sales to state residents.

Pennsylvania[edit]

In May 2011 Main Street released the names of businesses across the state of Pennsylvania that support requiring online retailers to collect sales taxes. Main Street also announced its intention to hand deliver a petition to each state legislator in order to encourage them to support legislation mandating equal treatment for traditional businesses and online retailers.[13]

In June 2011 Main Street launched an ad campaign in Pennsylvania to raise awareness about unfair competition from online retailers. The campaign featured television, radio, and newspaper ads across the state.[14]

In December 2011 Pennsylvania changed rules regarding what constitutes a physical nexus in the state that would require businesses to collect and remit sales tax. In February 2012 the Pennsylvania state government predicted that it would collect an additional $40 million in sales tax from internet retailers. As of February 2012 state tax authorities are attempting to collect sales tax from out-of-state online retailers, such as Amazon.com. Revenue Secretary Dan Meuser said that such companies would receive a one-time reprieve until September 2012 after which they could face enforcement action. Pennsylvania has also added a line on its 2011 income tax form for taxpayers to report online purchases and pay use tax. The Alliance for Main Street Fairness praised all of these actions.[15]

Strauss study[edit]

Sales tax in Pennsylvania is generally 6%, except in Allegheny and Philadelphia counties where it is 7% and s 8%, respectively. A recent study by Carnegie Mellon University professor Robert P. Strauss showed that Pennsylvania might be foregoing up to $400 million per year in revenue due to the failure of online retailers to collect sales tax. The same study also showed that Pennsylvania businesses could see an increase in sales of around $200 million per year and that as many as 2,766 new jobs might be created if all kinds of sales were treated equally.

South Carolina[edit]

Amazon had agreed to open a distribution center near Columbia, South Carolina that would employ 1,200 people in exchange for a five-year exemption from collection of sales taxes from shoppers in the state. The state House of Representatives rejected the deal in April 2011 and Amazon cancelled plans for its distribution center. Amazon resumed negotiations and offered 2,000 jobs in exchange for a sales tax exemption and other incentives. Under a compromise approved by the South Carolina state legislature in May 2011, Amazon agreed to notify South Carolina customers by email that sales tax was owed on their purchases but shoppers would still be responsible for paying the tax by themselves. Governor Nikki Haley said she plans to allow the bill to become law without signing it.[16]

In response to the state House passing legislation granting concession to Amazon.com the Alliance for Main Street Fairness said, “Today’s vote in the South Carolina House of Representatives is just one step in the process, yet it’s unfortunate that the majority of the House favors special deals for one prospective retailer at the expense of our state’s existing employers and their 375,000 employees. The vote is particularly disappointing in light of dubious, last minute promises that certainly appear to have influenced some legislators to switch their vote. We’ll rally our troops and voice our concerns to the Senate where we hope they will come to a more fair and rational decision. The case against this special deal continues to grow on a daily basis. We’re confident the Senate will stand with Main Street and against this exemption that is clearly a slap in the face to brick-and-mortar retailers across our state.”[17]

Main Street expressed strong disapproval of the South Carolina Senate's approval of this arrangement and called on Governor Nikki Haley to veto the legislation. In a press release Main Street said, “Nobody complained when Amazon was given free land, property tax cuts, job tax credits and a repeal of the limits on weekend sales. But in the end, this special exemption only passed after backroom deals and last-minute promises were made by Amazon officials – something which should disappoint everyone interested in transparency and good government."[18]

South Carolina has passed legislation that would require Amazon and other internet retailers to start collecting sales tax in 2016. As of January 2012, Amazon is not currently collectedly sales tax on purchases made by South Caroline residents but the company has agreed to notify South Carolina residents that they face liability for sales tax.[19]

Tennessee[edit]

In March 2011 Main Street ran advertisements opposing the efforts of Tennessee officials, including Gov. Bill Haslam, to finalize an agreement with Amazon.com that would exempt the company from collecting sales taxes in exchange for opening two distribution centers in the state. “Why would the state let Amazon get away with not collecting and paying the biggest source of revenue in Tennessee: its sales tax?” one ad said.[20]

In May 2011 Main Street responded harshly to testimony given to the state Senate Finance Committee by Amazon officials regarding their arrangement with the Department of Revenue for an exemption from collecting Tennessee sales taxes. In a statement a spokesman for Main Street said, “Why can’t Amazon come clean and provide lawmakers with details of the special deal they have claimed to secure with the Department of Revenue? Secret, backroom deals would hurt Main Street jobs and give an out-of-state company a competitive advantage over mom-and-pop shops across our state. Main Street businesses want to know: what Amazon is trying to hide?”[21]

A legal opinion by the state attorney general affirmed the constitutionality of a proposed bill in the state legislature that would require Amazon to collect sales tax on goods it ships to Tennessee residents. The opinion also stated that Amazon's construction of distribution centers in the state constitutes a physical nexus. The Alliance for Main Street Fairness called the attorney general’s opinion “encouraging news for the thousands of Tennessee small business owners who don’t want our elected officials to give Amazon special treatment.”[22]

Texas[edit]

in May 2011 Governor Rick Perry vetoed House Bill 2403, legislation on "e-fairness" to tax online sales in the same manner as sales made by traditional retailers. In response the Alliance for Main Street Fairness expressed confidence that bill would eventually pass in some form. The exact language of House Bill 2403 was amended to Senate Bill 1811, a fiscal matters bill to fund education and balance the state budget, by Senator Duncan and Senator Shapiro.[23]

In calling for passage of the legislation, Main Street cited a study done by Angelos Angelou that estimated that Texas loses $774 million in tax revenue due to the failure of online retailers to collect sales tax. The same study estimated that full compliance with sales and use tax laws would create 13,000 jobs in the state.[23]

Virginia[edit]

As of January 2012 State Senator Frank Wagner has introduced legislation that would require companies with a distribution center, warehouse, fulfillment center, office, or other such location in the Commonwealth of Virginia to collect and remit sales tax. Amazon has announced its intent to build two distribution centers in Richmond. This legislation is supported by the Alliance for Main Street Fairness.[24]

In January 2012 Virginia and Amazon.com reached an agreement regarding the collection of sales tax on purchases made by Virginia residents. Under the agreement Amazon will begin collecting sales tax on purchases made by Virginia residents on 1 September 2013. Amazon will begin collecting sales tax ten months after opening distribution centers in Chesterfield and Dinwiddle counties.[25]

In February 2012 Senate Bill 597 passed in the state senate and the finance committee of the state house of delegates. Senate Bill 597 would require out-of-state online retailers with a distribution centers in Virginia to collect state sales tax.[26]

Member organization[edit]

Alliance for Main Street members include Wal-Mart, Target, other large national retailers, and small businesses from across the country. The Alliance for Main Street website privacy policy lists a Arlington, Virginia UPS Store mail box as their physical mailing address.[27]

See also[edit]

References[edit]

  1. ^ Russian investment gives Plastic Logic flexibility, by Andrew S. Ross, The San Francisco Chronicle, 19 January 2011
  2. ^ a b California lawmaker pushes to tax online sales, by Marc Lifsher, Los Angeles Times, 20 January 2011
  3. ^ Major retailers back bid for 'Amazon tax', by Kevin Yamamura, Sacramento Bee, 20 January 2011
  4. ^ "California Myth vs. Fact". Alliance for Main Street Fairness. Retrieved 25 March 2011. 
  5. ^ Andrew S. Ross (1 July 2011). "Internet sellers must collect tax, like it or not". San Francisco Chronicle. Retrieved 7 July 2011. 
  6. ^ "Postponing Online Tax Bill Helps Create More Jobs". StockMarket Watch. 13 September 2011. Retrieved 15 September 2011. 
  7. ^ Dave Taylor (8 March 2010). "Amazon Reacts To Colorado Internet Sales Tax Measure By Firing Its Colorado Associates". The Huffington Post. Retrieved 24 February 2011. 
  8. ^ "Illinois governor signs bill targeting Internet sales". Reuters. 10 March 2011. Retrieved 25 March 2011. 
  9. ^ "Alliance For Main Street Fairness Praises Pat Quinn" (Press release). Alliance for Main Street Fairness. 10 March 2011. Retrieved 2011-03-25. 
  10. ^ Editorial (29 May 2011). "We must learn from Amazon, improve policy". The State. 
  11. ^ a b c Hansell, Saul. "Amazon Sues New York State to Void Sales Tax Rules". The New York Times. May 1, 2008.
  12. ^ Sage, Alexandria and Edith Honan. "NY Judge Tosses amazon.com Lawsuit Over Sales Tax". Reuters. January 13, 2009.
  13. ^ "Hundreds Of Pennsylvania Businesses Simply Want Fairness" (Press release). Alliance for Main Street Fairness. 24 May 2011. Retrieved 2011-06-01. 
  14. ^ BRENT BURKEY (1 June 2011). "Alliance launches Pa. ad campaign for online sales tax". Central Penn Business Journal. Retrieved 2 June 2011. 
  15. ^ "Pa. expects $40 million from tax on Internet retailers". Public Opinion. 13 February. Retrieved 23 February 2012. 
  16. ^ Lisa Miller (30 May 2011). "SC Senate Strikes Compromise To Get Amazon Back". WFAE. Retrieved 31 May 2011. 
  17. ^ "Main Street Responds To House Vote Battle For Brick-And-Mortar Business Continues" (Press release). Alliance for Main Street Fairness. 18 May 2011. Retrieved 2011-06-02. 
  18. ^ "Main Street Responds To South Carolina Senate Vote" (Press release). Alliance for Main Street Fairness. 27 May 2011. Retrieved 2011-06-02. 
  19. ^ Kenneth Corbin (30 January 2012). "Amazon Notifies South Carolina Shoppers of Sales Tax Owed". EcommerceBytes.com. Retrieved 31 January 2012. 
  20. ^ "Group pushes back on Amazon tax deal". Nashville Business Journal. 24 March 2011. Retrieved 31 March 2011. 
  21. ^ "What Is Amazon Trying To Hide? Online Retailer’s Testimony Brings More Questions Than Answers" (Press release). Alliance for Main Street Fairness. 19 May 2011. Retrieved 2011-06-02. 
  22. ^ by Mike Pare (29 June 2011). "Attorney General: State can force Amazon on taxes". Times Free Press. Retrieved 7 July 2011. 
  23. ^ a b "Despite Veto, Main Street Businesses Confident E-Fairness Language Will Be Passed In Fiscal Matters Bill During Special Session" (Press release). Alliance for Main Street Fairness. 31 May 2011. Retrieved 2011-06-02. 
  24. ^ "Virginia legislation targets Amazon.com". WDBJ7.com. 30 January 2012. Retrieved 31 January 2012. 
  25. ^ Web staff (22 February 2012). "Amazon.com will start collecting sales tax in Virginia". WTKR.com. Retrieved 23 February 2012. 
  26. ^ Mark Kelly (24 February 2012). "Bill Forces Online Retailers to Pay Up". WSET.com. Retrieved 23 February 2012. 
  27. ^ [1] UPS Store Physical Address

External links[edit]