Tax Act Aims to 'Level Playing Field' Between Offline and Online Retailers

A U.S. congressman earlier this month introduced an act that would allow U.S. states to require out-of-state sellers, such as online retailers, to collect sales tax. Currently, state tax is only collected when the buyer and seller are in the same state. According to store owners, they were at a disadvantage compared to internet sellers, such as Blue Nile.

Jewelers of America (JA), a trade association serving the U.S. fine jewelry retail marketplace, said on Friday that it welcomes the introduction of the Main Street Fairness Act, "which would close an Internet sales tax loophole that has hurt traditional jewelry businesses."

Congressman William Delahunt (D-MA) introduced the Act (H.R. 5660) on July 1. He had previously introduced sales tax fairness legislation.

“Jewelers of America applauds Rep. Delahunt’s efforts to level the playing field between traditional retailers and their online counterparts,” said JA President and CEO Matthew A. Runci.

In 1992, the U.S. Supreme Court made a ruling that barred states from requiring that remote sellers collect sales taxes. The decision was based on the complexity of collecting taxes for so many different jurisdictions. However, the Streamlined Sales and Use Tax Agreement (SSUTA) – adopted by 24 states – has simplified the process, bringing about changes that enable remote sellers to use streamlined electronic systems to collect various taxes.

Earlier this year, JA kicked-off a legislative action campaign which directed members and non-members to contact their representatives and ask them to reintroduce and pass sales tax fairness legislation. According to JA, nearly 300 businesses have taken action since it launched the campaign at the end of January. The campaign is part of Jewelers of America’s longtime efforts to enact sales tax fairness legislation.