Monday, December 14, 2015

E-fairness bill on deck in U.S. Senate this week

Over the past couple of years, several versions of e-fairness legislation have been considered by Congress. E-fairness legislation would eliminate the discrepancy between hometown brick and mortar businesses and out-of-state online retailers in collecting sales taxes at the point of purchase.

Currently on-line retailers with no physical presence in a state are not required to collect sales tax. Customers are responsible for paying the sales tax when the file their tax return. This outdated law puts our brick and mortar retailers at a significant competitive disadvantage.

A 2012 study showed South Carolina alone stands to lose $250 million in uncollected sales taxes. 

Some of the debate on Capitol Hill has been related to attaching this e-fairness legislation to another bill called the Permanent Internet Tax Fairness Act that would eliminate local governments’ ability to tax Internet services. Until now, any conversations on Capitol Hill regarding the PIFTA have been balanced with e-fairness legislation.

Last week, the U.S. House of Representatives dropped the PIFTA legislation into the customs reauthorization conference report. This addition to the customs reauthorization report raises concerns for two reasons. First, PIFTA has nothing to do with trade policy. Second, this proposed extension of the Internet Tax Freedom Act should not move forward without consideration of e-fairness legislation at the same time.

A vote in the U.S. Senate is expected on Tuesday, December 15. Contact Senator Graham's office and let him know South Carolina cities and towns need e-fairness legislation to level the playing field between hometown brick-and-mortar businesses and online out-of-state retailers. 

Specifically ask Senator Graham to support removing the PITFA provision from the customs reauthorization report and get e-fairness paired with the PIFTA debate.

Read more about the implications of this vote on local governments in this blog post from the Center for Budget and Policy Priorities.

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