Opinion: Online retail has taken billions in tax revenue from states

Nov. 26, 2012

An opinion piece on Politico by Rep. Steve Womack of Arkansas takes aim at online retailers. Womack believes that online retail has created a fundamental marketplace unfairness that costs states $23 billion a year in lost sales tax.

According to Womak, only Congress has the power to close this loophole with the Marketplace Equity Act of 2011 (H.R. 3179). 

The Act would grant states the power to enforce their own laws and level the playing field between brick-and-mortar businesses and online-only retailers, he said in the piece. MEA would also allow customers, rather than the federal government, to pick marketplace winners and losers.

Twenty years ago, when Quill v. North Dakota determined that states could not collect sales tax from remote — or out-of-state — sellers, our shopping habits were drastically different and it would have been impossible to predict how the Internet would change them. The same technology that has allowed the dramatic growth of the online retail marketplace has also significantly reduced the burden of complying with state tax laws.

Read more about online retailing.

Topics: Connectivity , Omnichannel / Multichannel , Online Retailing , Payments

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