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WASHINGTON DC – The Marketplace Fairness Coalition issued the following statement regarding the cloture vote in the Senate that allows debate to move forward on The Marketplace Fair Act:

“This vote represents an important first hurdle cleared in the effort to level the playing field for all businesses while restoring a state’s right to enforce it’s own laws.

“There is still an important debate ahead but it’s clear from this strong bipartisan vote that many Senators in both parties recognize this is a long overdue step towards helping states, local governments and America’s small businesses.”

The Marketplace Fairness Coalition is comprised of businesses of every size, sector, and channel of product distribution, located in every state throughout the country.

This month, brick-and-mortar retailers have reason to celebrate. Thanks to a bi-partisan group of U.S. Senators and Representatives, the Marketplace Fairness Act is back. The legislation, which was introduced earlier this month by Senators Mike Enzi (R-WY), Dick Durbin (D-IL), Lamar Alexander (R-TN) and Heidi Heitkamp (D-ND), and Representatives Steve Womack (R-AR), Jackie Speier (D-CA), Peter Welch (D-VT) and John Conyers (D-MI) resolves the differences between bills introduced in the Senate and House of Representatives last Congress.

Over the last several years, a broad coalition of Main Street businesses and organizations from across the country have come together to urge Congress to support marketplace fairness. With the introduction and strong bi-partisan support for the Marketplace Fairness Act, these groups have formally joined together to form the Marketplace Fairness Coalition. The members of the coalition represent nearly 3 million businesses, associations and organizations across the country. I’m proud to say that the International Council of Shopping Centers is one of the driving forces behind the coalition.

In addition to the private sector, I see a great deal of momentum for e-fairness growing at all levels of government, from local communities to state legislatures to Capitol Hill. Each month more states put pressure on Internet sellers to play by the same rules as their brick-and-mortar counterparts and collect sales tax at the point-of-purchase.  They need the support of Congress to get it done.  And we’re working to make sure they get it.

I have never been more optimistic about the chances of enacting federal legislation. And it has never been more important. Local businesses cannot afford another year of competing on an un-level playing field. Every day Main Street retailers are forced to shutter their doors because they simply cannot compete against an entire industry that enjoys a de-facto 5-10% government subsidy.

Please join us as we work to level the playing field for all retailers. Visit our website, sign up for updates and follow us on Twitter. Talk to your elected officials in Washington D.C. Tell them that we all need a sales tax system that supports our 21^st Century marketplace. Tell them that they should support the Marketplace Fairness Act. We’re closer than ever to passing federal legislation this Congress. We need your support to get it done.

Michael P. Kercheval is the President and Chief Executive Officer of the International Council of Shopping Centers (ICSC). Founded in 1957, ICSC is the premier global trade association of the shopping center industry.

Musical instruments are all about passion. Musical instruments are sold by a group of very passionate people at the brick-and-mortar level. Other than the 5% of our customer base that earn their living as professional musicians, the great majority are semi-professionals, garage band warriors, or just folks who play for their personal pleasure, spending their discretionary income on their passion. As a long-term, 30 plus years in business brick-and-mortar retailer, Advance Music prides itself on, and truly enjoys, the face-to-face relationships we establish with our customers, and the honest information we provide them in making buying decisions that make them feel great and provide a lifetime of enjoyment!

The number one hurdle that we encounter here when it comes to the price negotiation phase is the sales tax issue. We match Internet pricing all day long, but with the economy riding its constant up and down wave, every dollar counts to our customers, and while we absolutely understand that, we are also aware that each customer is legally obligated to pay this sales tax, whether buying in a local brick-and-mortar shop or online. We don’t feel it’s our job to explain this to any customer, and it would probably just alienate them in the process. My feeling is that most people don’t pay taxes on their online, out-of-state purchases.

I’m not stretching the truth when I say that at least twice a day a customer will ask us to “eat” the sales tax on a purchase. It immediately puts the sales person in an awkward position. You can attempt to explain the benefits of paying state sales tax, how the pot holes are fixed, fires put out, criminals arrested, etc., but most customers just care about the bottom line price. This is where the out-of-state Internet retailer has such a huge and unfair advantage over us…THEY ARE NOT REQUIRED TO CHARGE THE SALES TAX! So we, as local brick-and-mortar retailers, are forced to ask ourselves “Am I willing to take that 7% hit to my profit margin?” or “Am I willing to let this customer walk and lose this sale?” My favorite is the customers who use us as an Internet “showroom” and in some cases we’ll even “loan” them a product to try overnight in their home….they bring it back, tell us they love it, and ask “can you eat the tax?” I can’t tell you how much this hurts, especially when I just can’t do the deal at the slim margin and they simply buy online!

Hey Congress, level the playing field out there! Help all of us local retailers make this a non issue in our local brick-and-mortar shops. Let me pay my folks better, offer better benefits, and maybe even hire a couple of more employees based on my increase in business. Let my state receive the tax dollars it deserves to help fund local programs and municipalities. It really is that simple!

Mike Trombley is the owner of Advance Music Center in Burlington, VT.

During the outset of this holiday shopping season two record-breaking sales days have benefited online retailers.  Online sales during Black Friday exceeded $1 billion for the first time in history, and this past Cyber Monday was the biggest online shopping day of all time – with sales in the neighborhood of $2 billion.

In the modern-day retail marketplace, online retailers are ubiquitous, enjoy ease of access to consumers, and as this year’s Black Friday online sales and Cyber Monday sales demonstrate, these sellers enjoy great success.  Unfortunately, under existing law, online retailers enjoy something else – an inherent competitive advantage over brick-and-mortar retailers.

When a brick-and-mortar jewelry store sells an engagement ring, that store is required to collect sales tax.  However, when an online-only retailer sells the same engagement ring, that retailer is not required to collect sales tax.  To address this grave disparity in the treatment of brick-and-mortar versus online retailers under our current system, bipartisan coalitions in Congress have introduced the Marketplace Equity Act in the House and Marketplace Fairness Act in the Senate.

Both bills would give states the authority to require online retailers to collect sales tax on remote sales from the consumer and remit that tax to the consumer’s state.  This is not a new tax.  Rather, it is an existing but often uncollected tax.  Most consumers do not understand they are required under current law to remit sales tax for online purchases when the seller does not collect and remit sales tax.

If online retailers sell the same jewelry pieces to the same customers in the same neighborhoods as brick-and-mortar jewelers, then they should be required to adhere to the same tax laws – plain and simple.

Opponents of existing e-fairness legislation claim to be champions of small business and free market principles.  If this is indeed the case, then why are these critics such ardent proponents of an inequitable system that creates an economic incentive for consumers to buy a desired product online instead of from a brick-and-mortar store?

I applaud the efforts of the cosponsors of the Marketplace Equity and Marketplace Fairness Acts to restore competitive balance to the retail marketplace.  With the holiday shopping season in full swing, and as brick-and-mortar small businesses struggle to remain viable in an uncertain economy, I can think of no more appropriate time for Congress to once and for all put an end to an unjust and outmoded loophole in our sales tax laws.

Matthew A. Runci is the President and CEO of Jewelers of America (JA) in New York, N.Y.  JA is the national trade association for businesses serving the fine jewelry retail marketplace.  Its membership includes approximately 3,300 retailers and suppliers with over 10,000 retail storefronts in all 50 states and Washington, D.C.  Over 90% of JA’s members are single-store operators.

The market is the only thing that should be determining winners and losers when it comes to American businesses. Yet, since the early 1990s this has not been the reality for brick-and-mortar businesses across the country.  The 1992 Supreme Court ruling in Quill Corp vs. North Dakota have prevented states and communities from requiring sales tax collection from vendors not physically within their borders.  The effect has been a chronic and persistent imbalance in prices between online vendors and their brick-and-mortar counterparts. The exclusion of sales tax at the state and local level allows online vendors to offer prices 5-8% lower across the board. This lower pricing not only puts brick-and-mortar retailers at a disadvantage, it also deceives the consumer.

The subtle reality is that the Supreme Court’s ruling does not eliminate sales tax for online purchases; it merely allows online vendors to push that burden onto consumers.  The consumers still owe the tax, and so they aren’t actually saving money when they purchase from an online retailer rather than at a store like mine.  To be clear, under current law, consumers are required to write two checks for every one online transaction where the sales tax is not collected: one check to the vendor and one check to the state/local revenue service.  This is not only inconvenient, it is ridiculous.

Some online businesses have and will continue to complain that collecting and remitting sales tax to all 50 states with various rates and laws is too cumbersome and time consuming.  But the truth is that affordable and easy-to-use software exists that will do this for them.  What’s actually cumbersome is for consumers to track, calculate and report each every online purchase and submit the tax to state and local revenue services.  Brick-and-mortar stores are required to this for their consumers.  It shouldn’t be any different for online vendors.

It’s high time for our elected representatives in Washington, D.C. to level the playing field by passing the Marketplace Fairness Act and the Marketplace Equity Act.  Doing so will not only level the playing field for brick-and-mortar retailers in Michigan and across the country, but will also dispel the myth of “tax-free online shopping” and make life easier for consumers.  That’s something we should all be able to get behind.

Dan Marshall is the 2^nd generation operator of a family-owned chain of music stores called Marshall Music, with seven brick-and-mortar stores located throughout Michigan.

Like many small businesses, mine is a family affair. My father George and my mother Sylvia entered the bookselling business more than 30 years ago in an old gas station. For three decades our family has nurtured and grown Givens Books and later Little Dickens into the successful businesses they are today.

But local businesses like mine and the communities they serve are facing a serious threat from online retailers who are exempt from collecting sales tax.

It’s time for Congress to address the online sales tax collection issue.

When online businesses without a physical presence in the state circumvent sales tax collection, they pull customers away from Main Street retailers like my business, where our friends and neighbors work, local products are sold and taxes collected. These sales taxes, in turn, go to local schools and a myriad of infrastructure projects. In addition to the attrition of locally owned and operated businesses, which constitute the backbone of our communities, badly needed revenues are also lost because of this unfair loophole for online-only retailers. This year, Virginia will lose over $200 million in uncollected sales tax revenue. The most hurtful irony in this whole saga is that the lost revenue would have come from behemoth retailers making billions in profits…in short, the ones most able to afford the collection and remittance of these taxes.

Online-only retailers can sell items at a lower price — guaranteed to be 4-7% cheaper because they are exempt from having to collect sales tax.

This competitive advantage is fundamentally contrary to the principles of the free market system that have allowed America to thrive for so long. It also amounts to a government subsidy for certain online-only retailers…and it’s crushing local economies.

It only makes sense for online retailers to collect sales tax on purchases…as brick-and-mortar businesses in Virginia do every day.

Givens Books sells goods online, too.  I’m not opposed to online retailing.  On the contrary, it’s a great way to diversify your business model. However, the problem is that brick-and-mortar retailers are at a distinct disadvantage compared to online sellers. We pay property taxes, trash collection fees, electricity bill surcharges and other fees.  Online sellers do not.  And as state and local governments look for ways to make up for the lost sales tax revenue all of these other costs are likely to go up, further hurting local businesses.

Congress must pass the Marketplace Fairness Act and the Marketplace Equity Act, and give states the power to end the de-facto government subsidy for online retailers.

Danny Givens is the owner of Givens Books and Little Dickens in Lynchburg, VA.

Everyone seems to think that online sales tax collection is about large online companies, like Amazon, trying to crush small online businesses.

My experience as a small business owner has been exactly the opposite. State efforts at online sales tax collection have made it much, much easier to run my small business.

My wife and I own a small sheep farm in upstate New York offering for sale our livestock and wool products both online and at festivals and fairs in many states. Figuring out sales tax and filling out all the sales tax returns was, as you might expect, complicated and exhausting.

Just over two years ago I started using an automated sales tax service that handles sales tax calculation, collection, and remittance. It’s been a life-saver: no more trying to figure out if wool is in the same tax category in different states, no more filling out the wrong form, no needless hours spent looking up all the different sales tax rates and trying to figure out which one applies to which product.

I’ve since learned that automated sales tax services work with states and the Streamlined Sales and Use Tax Agreement (SSUTA), which states can voluntarily adopt to streamline sales tax processing for retailers. SSUTA states test and certify these sales tax management services making sure they function properly. I believe that even a small retailer using great software might have a hard time collecting sales tax for every tax jurisdiction in the country without the simplification measures set forth in SSUTA.

All of which leads me to the reason why I’m supporting the Marketplace Fairness Act and the Marketplace Equity Act, two bills that would grant states the right to require online sellers to collect sales tax, and hold them harmless for any errors that may occur.

The proposed legislation provides an incentive for states to simplify their sales tax laws, so that tax categories and definitions are standardized from state to state and there’s just one standard simplified electronic return for all states. These simplification measures make a huge difference for me, as I believe they would for all small business owners.

How do the two bills motivate states to simplify their sales tax laws? By making it a requirement of online sales tax collection. The bills maintain states can require out-of-state retailers to collect sales tax, but only if they make it simple for retailers to do so.

The bills don’t require states to adopt SSUTA’s guidelines, but they do require them to adopt SSUTA’s goal of making it simple for retailers to collect sales tax, and it requires them to accomplish some of the same goals as SSUTA (for instance, standardizing tax category definitions, so wool is in the same tax category in every state).

The combination of today’s freely available technology and states’ simplification efforts is a great benefit for small businesses like mine. It eliminates bureaucracy, promotes efficiency, and increases productivity and profitability. It makes dealing with sales tax much, much easier for small business owners.

Passage of S.1832 the Marketplace Fairness Act and H.R. 3179 the Marketplace Equity Act will prompt all states to simplify their sales tax laws. Therefore, I support these two bills.

To be clear, they do not create a new tax or raise taxes. They simply make collecting sales tax much easier for the millions of small business owners just like me. Consumers also benefit because they no longer have to self-track and remit the sales tax due on their individual state tax returns.

Congress, I urge you–enact the Marketplace Fairness Act and the Marketplace Equity Act.

Sten R. Wilson is a small business owner.  He runs Point of View Farm, which is located in the Mid Hudson Valley of New York.

In order to help the small businesses, the backbone of our national economy, and improve local economies all over the country, we desperately need to level the playing field for brick-and-mortar retailers.

We are currently competing against online-only retailers at a nearly 10% disadvantage due to an unfair loophole in the current sales tax system.  We must not only collect, but account for and remit sales tax – regardless of our size – while online retailers do not—even though purchasers (from them as well as from us) owe the tax.

Internet retailers claim they have no physical presence (or “nexus” under the law) in most states and therefore do not use services and should not have to collect sales tax.  But many have warehouses and distribution centers all over the country and make sales based on so-called affiliate relationships in every state every single day.  In my view, that’s a sufficient connection to the state!  They absolutely need to be made to compete on a level playing field.  Otherwise, brick-and-mortar retailers will not survive.  People take small businesses for granted, but no business can survive at a 10% disadvantage over time.  And should we not survive, the economy of the individual states and the country as a whole will suffer.

Brick-and-mortar businesses not only collect sales tax, they hire workers, pay their wages, pay payroll taxes, property taxes, and a myriad of other taxes.  As importantly, they engage in and support their communities in many ways: contributing to and participating in school, church and library events, volunteering to help neighbors in need, serving on boards and supporting everything from parks to public service programs.  As the long-time owner of a bookstore, I can testify that my business is an active participant in our community, working with schools, libraries and civic groups, helping teachers with their curricula, donating books and serving on boards in the arts and business communities, at schools and universities as well as the churches that we and our children attend.  We are a vital part of the communities in which live and work.

We may only employ 25 people (for whom we also provide health insurance) at the King’s English Bookshop, but we anchor a previously run-down neighborhood which, over the 35 years since we opened our doors, has added business after successful business.  Our neighborhood is now known throughout our city as a wonderful and walkable area.  Real estate prices are not only high but stable, even in the midst of the recession—we are a boon to the local economy.  And we are not alone.  Areas such as ours all across the state and around the country make for a vibrant economy and heart and soul of communities.

We aren’t asking for special favors; we are by our very nature fiercely competitive and we do just fine in a fair retail environment.  And that’s all we’re asking for—fairness.  There is no conceivable reason why our government should offer an unfair advantage to one segment of retail over another—especially a segment that gives little or nothing back to our economy or our communities.

Please, let the free market work the way it was meant to—on a level playing field.

Betsy Burton is a small business owner.  She runs The King’s English Bookshop in Salt Lake City and is the Co-Chair of Local First Utah.  Betsy is also a member of the Alliance for Main Street Fairness.

According to a recent article in The Atlantic, a new study by “Stanford researchers” tries to take a look at the effects that sales tax would have on online shopping.

The problem is, they they don’t take into account that sales tax is already due on online purchases—a point derided in the study as “tax surprises.”

The study, “out this week on the National Bureau of Economic Research, looks at how sensitive online retail is to tax changes by tracking the behavior of eBay users.” It doesn’t include real estate and auto transactions.

The study concludes that “a one percentage point increase in a state’’s sales tax increases online purchases by state residents by just under two percent, but decreases their online purchases from home-state retailers by 3-4 percent.”

But the same sales tax you pay locally is already due online. Nobody is suggesting raising sales taxes, online or otherwise—certainly not differentially. So what does this study really tell us about online sales tax collection?

Not much. It doesn’t take a team of economists to tell us that an increase in sales tax rates causes a decrease in sales, at least temporarily. Thank goodness raising sales tax rates isn’t on the table.

What we still don’t know is how online sales tax collection—having retailers collect the sales tax that is already due on online purchases, so individuals don’t have to calculate and remit it themselves—would affect online shopping. It’s too bad the researchers didn’t look at that question. But the Atlantic article ventures a guess:

Many shoppers aren’t just moving to the web because of price, but for convenience. All other things equal, it’s their default choice. And as that attitude becomes more prevalent, the impact of a sales tax could diminish.So would a sales tax put a crimp in online retail? Quite possibly. But it’s hard to believe it would be anything but temporary. (emphasis ours)

eBay is on record as opposing online sales tax collection—is it possible that they sponsored or otherwise supported the study in the hopes that it would add fuel to their argument?

After several days of consideration, this important question burned brighter and brighter, so we gave in and bought our own copy of the 42-page study (for $5.00, and no, they didn’t charge sales tax—see picture—and yes, e-books are subject to sales tax in the State of Washington. Mental note: Don’t forget to report and remit $0.48 to the Washington Department of Revenue because the online seller refuses to do this for me like every local store must.)

The paper is very upfront about pointing out potential conflicts of interest. One of the four authors, Neel Sundaresan, is Senior Director for eBay Research Labs and is employed by eBay. Another of the authors is Professor Jonathan D. Levin, Chair of the Department of Economics at Stanford University, who was a paid consultant to eBay Research Labs in 2010 and 2011.

Don’t misunderstand the point of our post—we would love to see a study that truly looks at the actual effects of online sales tax collection on online shopping. Unfortunately, this isn’t it.

We also wish the team had taken a moment to report on two very basic questions:

1. Out of all the transactions data they had access to (all transactions from 2008 to 2010), how many transactions included sales tax?
2. Out of all the sellers represented in the transaction data, how many sellers conducted more than 200 transactions or had over $20,000 in sales in each of the three years? Similarly, how many sellers exceeded $50,000 in sales in each of the three years? Finally, how many sellers exceeded $150,000 or $500,000 in sales in each of the three years?

Given the intensity of debate around this issue at the local, state, and federal level—particularly around these two points—it is unfortunate that the researchers missed (or avoided) the opportunity to provide such insight.

FedTax makes it easy for businesses to calculate, collect, and remit sales tax with its free TaxCloud sales tax management service. It was founded by e-commerce veterans who have extensive experience in large-scale internet services and have been directly involved in building some of the most recognizable brands on the internet, including Google, American Express, Microsoft, and Expedia.

This piece originally appeared on The Daily Caller.  It is repurposed here with their permission.  Click here to read the original piece.

When government implements job-creation policies, sometimes it ignores the obvious. Take retail employment. Retailers with actual storefronts employ 1.9 million Americans, more than any other category, according to the Bureau of Labor Statistics.

Yet, retail jobs are in jeopardy. We see vacant stores throughout America. In the fourth quarter of 2011, our national retail vacancy rate was 11 percent, up from 7.7 percent in the first quarter of 2008, according to Reis Reports. It’s a retail vacancy rate we have not seen since 1991. Meanwhile, the unemployment rate for the retail trade is 9.3 percent, one point higher than the national unemployment rate of 8.3 percent.

Why has the retail industry suffered more than other sectors of the economy? Because brick-and-mortar retailers face a plethora of bad government policies.

1.) Retailers pay the highest corporate tax rate. The Obama administration’s recently announced plan to lower corporate tax rates reveals that retailers pay the highest effective tax rate of any industry listed — 31 percent. Retailers have almost no tax loopholes that can lower their effective rates. And unlike other industries, retailers do not have the option of moving overseas.

2.) Brick-and-mortar retailers operate in an unfair market. In 45 states, brick-and-mortar retailers must charge a state sales tax while their Internet competition does not. While consumers in these states are required to report and pay sales tax for out-of-state Internet purchases, few do. Even Amazon — which benefits significantly from the status quo — agrees that the current system must be changed.

In 2010, Virginia’s 8 million citizens reported and paid a grand total of $82,000 of sales tax for out-of-state sales purchases. Given Virginia’s four percent sales tax, that means citizens reported buying only $2 million — or 25 cents per citizen — of online goods from out-of-state providers. Amazon alone had well more than $2 million of Virginia sales. Although Amazon does not publicly break down U.S. sales, in 2010 the online retailer had more than $18.7 billion in North American sales. If you took Virginia’s share of the 463 million combined population of Canada, Mexico and the United States, this would translate to $323 million in Virginia sales — certainly a lowball estimate because it is improbable that Mexicans or even Canadians buy from Amazon at the same rate as Americans.

So Amazon purchases alone are underreported at least a hundred-fold, if not a thousand-fold, in Virginia and likely others states. This means Virginia retailers are losing significant revenue to out-of-state sellers. More, the Virginia government is being deprived of at least $10 million in revenue from Amazon purchases. This money not only represents an unfair burden on brick-and-mortar retailers but also reflects lost revenue that could be used to provide services to Virginia citizens. A simple congressional fix, the Main Street Fairness Act, would put online and brick-and-mortar retailers on the same footing.

The Virginia situation has in part been resolved for Amazon because Gov. Bob McDonnell announced on February 22 that Amazon would begin collecting sales tax from Virginia residents by September 1, 2013, or earlier if Congress acts to resolve the situation. But Amazon is just one Internet seller among many.

3.) Brick-and-mortar retailers face a complicated and anti-competitive regulatory environment. The Obama administration has been especially harsh on retailers. The National Labor Relations Board has imposed all sorts of new rules allowing for quick and easy unionization and requiring new workplace notices. Meanwhile, Obamacare places new burdens on all employers, but retailers are especially hard hit because many of their employees are seasonal or part time. The Dodd-Frank financial reform law, with its 800 pages of new rules, is yet another regulatory nightmare for retailers. This has left the market only to big players who can afford to comply with the new law.

Retailers are the heart of every town in America. But they are increasingly burdened by government policies that are putting them out of business.

Until and unless we change our direction and start confronting a ridiculous situation where job-creating employers pay higher taxes and face costlier regulations than their online brethren, we will see even more empty storefronts, higher unemployment and more services cut by state and local governments starving for sales tax revenue.

Gary Shapiro is president and CEO of the Consumer Electronics Association (CEA)^®, the U.S. trade association representing more than 2,000 consumer electronics companies, and author of the New York Times bestselling book, “The Comeback: How Innovation Will Restore the American Dream.”