For Immediate Release

Contact:  Pamela Rucker  (202) 783-7971

 

National Retail Federation Critical of House Internet Tax Measure
Internet Non-Discrimination Act Perpetuates Unfair Treatment of 
Main Street Retailers and Low-Income Consumers

 

            Washington, DC, May 4, 2000 – The National Retail Federation today denounced a House of Representatives bill that makes permanent the moratorium on new, multiple and non-discriminatory taxes on remote commerce, but does nothing to address the disparity that exists in sales and use tax collection obligations among different retail channels.

             “H.R. 3709, the ‘Internet Non-Discrimination Act’ in fact, would continue the discrimination that occurs against Main Street retailers in their tax collection obligations, and against low-income individuals who lack the means to shop tax free over the Internet,” said Steve Pfister, NRF Senior Vice President of Government Relations.  “While retailers oppose new taxes on the Internet, the industry believes that Congress should not extend the current moratorium without addressing the inequity in the state sales and use tax systems.

NRF has advocated a level playing field approach to tax policy where products are taxed -- or not taxed -- the same regardless of how they are ordered or delivered.  NRF believes all retailers should have the same collection responsibilities – whether the transaction is made in a traditional store, through a traditional retailer’s Web site, by an Internet-only retailer or through any other type of remote seller. 

“In an industry where a 1-2% profit margin is standard, a 6-8% tax break is a significant competitive advantage,” Pfister added.  “While this legislation is intended to be non-discriminatory, it would allow out-of-state retailers to avoid tax collection at the expense of Main Street retail businesses who simply can’t compete with such an unfair tax pricing advantage, and permit the wealthy to enjoy a significant tax break.”

NRF also warned that if H.R. 3709 is adopted and forwarded to the full House, resolution of the state sales and use tax inequity issue could be deferred indefinitely.   The resulting erosion of the state sales tax base could impact state and local services to communities.

The National Retail Federation (NRF) is the world's largest retail trade association with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet and independent stores. NRF members represent an industry that encompasses more than 1.4 million U.S. retail establishments, employs more than 20 million people -- about 1 in 5 American workers -- and registered 1999 sales of $3 trillion.  NRF’s international members operate stores in more than 50 nations.  In its role as the retail industry's umbrella group, NRF also represents 32 national and 50 state associations in the U.S. as well as 36 international associations representing retailers abroad.