Independent Retailers Laud OIA Decision to Back Internet Sales Tax Bill

Nov 16, 2011

Topic: Retail

Independent outdoor specialty retailers hailed OIA’s announcement last week that it had endorsed the Marketplace Fairness Act, noting that it will simultaneously help state government balance their budgets while restoring equity between brick-and-mortar and remote online retailers.

“I’m a full supporter,” said Mike Massey, an owner of Massey’s Outfitters, which now derives about half its revenues from online sales and half from four brick-and-mortar stores in the New Orleans market.

“As far as I’m concerned, it would probably be revenue neutral for us. It would probably drive as many people into the store as we would lose online. In the end, no matter what, it’s basically better. Everyone should pay the same sales tax. It’s irrelevant whether you buy it on line or not. It’s just fair.”

Smaller retailers have raised concerns over the logistical challenges of calculating and collecting sales taxes for more than 7,800 tax jurisdictions. However, The Marketplace Fairness Act goes a long way toward addressing those concerns. First, it requires states exempt  retailers with less than $500,000 in annual remote sales.

Secondly, it would require states to provide retailers and third-party vendors with the software needed to automate the calculation, collection and remittance process. States would have to indemnify remote sellers and vendors from liability, including any penalties or interest, for collecting the incorrect tax if the error resulted from incorrect information the state provided.

As owner of Erehwon Mountain Outfitters, which operates six stores stretching along the western shore of Lake Michigan from Chicago to the Milwaukee area, Rudi Mayer strongly supports the OIA position. Mayer said Erehwon has lost lots of business to online retailers who don’t have to collect Chicago’s 9.5 percent sales tax.

“We are going to see greater tax enforcement coming from a number of different directions to solve the economic woes in this country,” said Mike Garcia, owner of Northern Lights Trading Co., which operates two stores in Bozeman, MT and has been building up its e-commerce operations. “So why not pass legislation  that does level the playing field .”