Amazon Commitment to Collect Sales Tax in California a Major Step toward Level Playing Field

Sep 23, 2011, 14:00 ET from Retail Industry Leaders Association

California Deal Sparks Interest in a Comprehensive Federal Fix

ARLINGTON, Va., Sept. 23, 2011 /PRNewswire-USNewswire/ -- The Retail Industry Leaders Association (RILA) thanked California Governor Jerry Brown for signing legislation that would help level the playing field between online-only retailer and brick and mortar stores across California.  The new law is a big victory for Main Street retailers that have battled to close a loophole that gives Amazon and other e-tailers special treatment in the tax code.  

"A true free market depends on treating all businesses equally, getting government out of the business of picking winners and losers," said Katherine Lugar, RILA Executive Vice President for Public Affairs.  "For too long U.S. tax policy has favored online-only retailers like Amazon over the brick-and-mortar stores that create jobs and serve our communities, and it's time to end that special treatment and give all businesses the chance to compete and create jobs in a free and fair market."

California joins Texas and a growing list of states that have passed or are drafting e-fairness legislation to address antiquated pre-Internet rules that allow online retailers without a "physical presence" in a state to skirt the obligation of collecting and remitting state sales taxes, giving those e-tailers a perceived price advantage over local retailers. After decades of federal inaction, these state efforts have sparked a renewed interest in federal legislation that would level the playing field nationally for all retailers.  

"Amazon's agreement to collect and remit sales taxes in California is an admission that they have the ability to play by the same rules as other retailers, and it's time for them to play by those same rules nationally," said Lugar.  "I suspect other states engaged in this issue are now questioning why Amazon maintains its need for special treatment in their state, while publicly acknowledging such special treatment is unnecessary in California."

RILA has already begun working with a coalition of large and small retailers to urge Congress to craft a simple federal solution that levels the playing field for all retailers.

"The days are numbered for those special interests that defend a broken marketplace and government granting special treatment to a select few companies," said Lugar. "A level playing field will increase competition and promote growth both online and on Main Street. "

RILA is the trade association of the world's largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.

SOURCE Retail Industry Leaders Association