Information Week had the story on a different retailers association that had the opposite opinion from the National Retail Federation. The Electronic Retailers Association issued a statement on Thursday squaring off over legislation that would require Internet merchants, mail-order houses, and other "remote sellers" to collect sales tax across state lines."
The debate is based around U.S. Representative William Delahunt's, D-Mass., bill (H.R.3396) that would allow states that have implemented the Streamlined Sales and Use Tax Agreement (SSUTA) to require out-of-state sellers to collect sales tax on merchandise sold their residents.
The ERA opposes the bill, saying it would stifle e-commerce and burden electronic retailers with costs and compliance problems.
"In a very short amount of time, the Internet has become an unprecedented marketplace where the playing field is level for retailers both large and small," Barbara Tulipane, ERA President and CEO, said. "The Streamlined Sales Tax Project and its provisions would create a cost-prohibitive barrier for smaller retailers who are the lifeblood of our economy."
ERA said it will actually discriminate against online sellers.
"Making electronic retailers responsible for computing, collecting, and remitting tax for thousands of taxing jurisdictions with different rates and coverage is unfair and will significantly harm the growth of e-commerce," the group said in a statement released this week. The group pointed out that the agreement allows states with multiple tax rates to adopt new an additional rate, which the ERA said could force electronic retailers to administer 15,000 tax rates. The ERA also said that direct marketers would have to pay for taxes customers fail to pay, while traditional retailers are not held responsible. Finally, it said that online retailers don't enjoy tax incentives available to in-state businesses. Those requirements would put online sellers at a competitive disadvantage, ERA said.
The ERA said more time is necessary to develop consensus among the affected parties for a "rational, practical and simple system for assessing and collecting taxes" from Internet sales.