On June 21, 2018, the U.S. Supreme Court issued its much-awaited decision in South Dakota v. Wayfair. In its ruling, the court overturned the precedent set in its 1992 Quill Corp. v. North Dakota ruling that prevented states from requiring online and other “remote” sellers to collect their sales tax unless the seller had a physical presence in the state. Now that the Supreme Court has ruled that online sellers can be required to collect sales tax, states are preparing to move forward.
Sourced from NRF.
THE ISSUE
Brick and mortar retailers in the 45 states with a sales tax are required by law to collect tax on virtually all of their sales.
With the continuing growth of the internet, local stores have faced increasing competition from out-of-state online sellers who easily undercut them on pricing because of low overhead and high volume.
$25 BILLION
With as much as $25 billion in sales taxes going uncollected each year nationally, the disparity has threatened jobs provided by local retailers and has become worse as more shopping has moved online.
QUICK TALKING POINTS
1. This is NOT a new tax, it is a collection issue. This is an existing tax that all brick and mortar retailers are required to collect. Virginia consumers are required to remit Use Tax for any online purchases not subject to Sales Tax. Sales Tax Fairness effects out-of-state online retailers that are not currently collecting and remitting this sales tax.
2. When online sellers are not required to collect sales tax, they are given an unfair price advantage over local bricks-and-mortar merchants.
3. With sales tax amounting to 7 percent in some areas, Main Street retailers have seen increased evidence that their customers are buying online to avoid the tax.
4. Online sales tax policy also has implications for the broader economy. It is estimated that requiring online sellers to collect the same as local stores could increase gross domestic product by more than $500 billion and create 1.5 million new jobs by 2022.
5. Twenty-seven states have already enacted change to level the playing field for brick and mortar retailers. It is evidence that today’s technology has eliminated concerns because a wide variety of low-cost and free software is now available to automatically collect the sales tax owed.
CONTACT YOUR LEGISLATOR
Contact your representatives NOW to let them know SALES TAX NEEDS TO BE FAIR.
SAMPLE LETTER
I am writing regarding the important issue of Sales Tax Fairness in the Commonwealth of Virginia. In light of the recent United States Supreme Court decision in Wayfair v. South Dakota, the Commonwealth has an opportunity to level the playing field for brick and mortar retailers across Virginia by voting in support of SB 1083 and HB 1722.
Retailers have been fighting for this level playing field for close to 20 years, and with the increasing popularity of shopping online, it is becoming even more important. Until Sales Tax Fairness is passed in Virginia, your local brick and mortar retailers are at a disadvantage to those online-only retailers that sell into the commonwealth. This unlevel playing field harming the local businesses that support your community. Brick and mortar retailers are more than happy to compete with online retailers, however, they want the competition to be on level ground.
It is important to note that this is NOT a new tax, rather it is a matter of the Commonwealth collecting a tax that is already due. When citizens shop online, they are supposed to remit a use tax if sales tax is not collected by the online retailer. The vast majority of Virginians do not do this – either intentionally or unknowingly.
Since the Supreme Court Ruling, 27 other states have enacted some form of Sales Tax Fairness. If Virginia fails to enact legislation, this will not only put Virginia’s local brick and mortar retailers at a disadvantage it will also be detrimental to Virginia’s online-only businesses selling into other states. I implore you to vote in support of (bill number). This is a vote in support of your local brick and mortar retailers, and therefore your local community.
Sincerely,
*Click on the button to copy the text. Paste the text (e.g. ctrl+v) afterward in a different window.
BILL NUMBERS AND LINKS
SENATE | SB 1083
HOUSE | HB 1722
