Online retail giants have been challenging Colorado’s Main Street merchants on price for nearly a generation now, unfairly helped by an out-of-date U.S. Supreme Court ruling that leaves most online sales free of sales tax. Every year, this unfair competition makes it more difficult for these stores to continue to offer the jobs, personal service, support for local organizations, and other contributions only a local business can offer to a community. And it takes away tax revenue needed to pay for vital services such as police, firefighters, and schools.
Fortunately, federal legislation has been introduced by Rep. Jason Chaffetz, R-Utah, a key member of Congress, which could finally shut down this loophole and allow states to require online sellers to collect sales tax in the same manner as local stores.
In Colorado, the General Assembly and Gov. John Hickenlooper enacted legislation two years ago to put such a collection program in place once Congress acts.
The “Remote Transactions Parity Act” is not the first bill in Congress aimed at leveling the playing field between online sellers and local merchants. But after more than a dozen years of efforts, it may be the bill with the best chance of passage. It has broad and growing bipartisan support. Among other refinements, it exempts more small online sellers, protects them against audits, and gives them free software that makes collecting sales tax as easy as calculating postage.
Main Street retailers in Colorado do not mind fair and honest competition, but Washington should not continue to allow out-of-state "e-tailers" to have an unfair advantage by not collecting the same tax all other retailers collect.
CML, along with the Colorado Retail Council, encourages Colorado’s Congressional delegation to support Colorado merchants and Colorado jobs by co-sponsoring the House legislation and helping to get it signed into law before the end of the year. It is time for a level playing field for our hometown stores.
We hope you will encourage your representatives to do the same. While Congress is in an August recess, it is very important that you touch base with Reps. Coffman, DeGette, Perlmutter, Tipton, Lamborn, Buck, and Polis - all of them will be traveling throughout their districts. Invite them in to a city council or town board meeting. Talk to them in their offices. Track them down at your county fairs this month. Ask them to support the legislation, and to sign on as co-sponsors.
We would love to know the results of your efforts!