Supporters of a level tax playing field were in the spotlight this week as a House Judiciary Subcommittee held hearings on legislation that would allow states to collect sales and use taxes on remote commerce.

Robert Benham, owner of Balliet’s, an Oklahoma City women's apparel store and former Chair of NRF's Independent Stores Board, testified on behalf of NRF before the Subcommittee on Commercial Administration and Law in support of a level tax playing field for all retailers across all channels of distribution and explained how small retailers are impacted by an unfair sales tax structure.

"We are concerned about the growing erosion of the sales tax base in the communities where we live, work and raise our families," Benham testified. "It’s time for Congress to restore basic tax fairness to all retailers."

Retailers are required under current state laws to collect sales and use taxes from a customer and immediately remit these taxes to the state. However, based on two Supreme Court rulings, retailers without a physical presence in the purchaser’s state are not required to collect and remit a state’s sales and use tax. Since many Internet sites and remote sellers are not located in a purchaser’s state, they do not have to collect these taxes, creating an unlevel playing field.

As a small retailer, Benham said he sees the impact of the existing inequities in the sales and use tax system, allowing remote sellers an unfair advantage in the marketplace. "Government tax policy shouldn’t determine the winners and losers," Benham added. "Consumers should pick winners and losers based on factors that they decide are important such as selection, service, convenience. Tax policy shouldn’t provide one retailer a pricing advantage over another."

Earlier this year, the House approved a 5-year extension of the Internet Tax Freedom Act, which imposed a moratorium on new taxes on the Internet, but did not address the existing sales tax inequity. To date, the legislation has been held up in the Senate, often the more deliberative body, until the sales and use tax issue has received the attention it is due. With only a short time remaining in the legislative session, Congress may be unable to complete action on the 5-year extension, leaving it and the sales tax issue to be dealt with next year.

While the battle to grant Permanent Normal Trade Relations (PNTR) status to China has shifted to the Senate, the House of Representatives still faces a second debate on trade with the world's most populous nation. This week, Representative Dana Rohrabacher (R-CA) introduced a resolution to disapprove of the President waiver of the Jackson-Vanik statute, granting China NTR for another year.

While the House approved PNTR, the Senate has yet to act on similar legislation. In addition, even if the Senate passes a PNTR measure, China would not receive PNTR until it becomes a member of the World Trade Organization. Given the victory on PNTR, some legislators have not expressed much enthusiasm for a second vote on the issue.

Also this week, a second resolution introduced by Rohrabacher disapproving the Jackson-Vanik waiver for China's southern neighbor, Vietnam, was reported out of the House Ways and Means Committee with a negative recommendation. With an adverse report, the measure is unlikely to be approved. Last year, the disapproval resolution was defeated by a strong 297 to 130 vote, and a similar margin is expected this time around.

On Friday, President Clinton signed into law the “Electronic Signatures in Global & National Commerce Act” (S. 761) in Philadelphia. The E-sign Act gives the same legal certainty to electronic signatures as ink signatures. The measure creates a national legal standard for digital transactions, allowing businesses and consumers to conduct legal affairs electronically and drastically cutting costs for retailers and consumers.

Specifically, electronic signatures and records will allow businesses and consumers to: form and sign contracts; collect and store documents; and, send and receive notices and disclosures. Checks can be signed electronically and applications for loans and services, such as credit card and repair warranties, can now be completed online.

The law also includes numerous consumer protections including giving the consumer the opportunity to consent to the use of electronic records and also the withdrawal of that consent. It also ensures that the consumer is provided with a statement of software and hardware requirements for access and retention of electronic records.

NRF has played a key role in the development and passage of this landmark legislation over the past four years. “Enactment of the E-sign legislation demonstrates the commitment of Congress and the Clinton Administration to using new technology to make life easier for retailers and their customers,” said Steve Pfister, NRF’s Senior Vice President for Government Relations.

Summaries of the law will be available on NRF’s website. If you have questions, please contact Sarah Whitaker at (202) 626-8109.

With both sides in the ongoing debate over an anti-trust exemption for doctors stepping up their pressure on legislators, the "Quality Health-Care Coalition Act” (H.R. 1304) passed the House of Representative late Thursday night by a vote of 276-136. The measure, which NRF strongly opposes, creates an exemption under anti-trust law that would permit doctors to form "cartels," leading to higher fees and increased health insurance costs.

The legislation originally had been scheduled for consideration last month, but was pulled after a number of Republicans protested. Despite the opposition from within his own party, House Speaker Dennis Hastert (R-IL) promised bill sponsor Rep. Tom Campbell (R-CA) that the measure would be considered before the July 4th recess.

By removing competition, health care professionals could engage in boycotts or price-fixing, which are currently illegal. It would also allow doctors to insist on contracts that prohibit nonphysician providers' services, depriving consumers of their right to choose. Recent studies estimate that the bill could increase health care costs by as much as $80 billion a year.

To date, no companion legislation has been introduced in the Senate. NRF will continue to actively lobby the Senate to block the measure, and will keep you apprised of any developments. If you have any questions, please contact Katherine Graham Lugar at (202) 626-8195.

The Senate Judiciary Committee this week finally took up and passed class action reform legislation. The measure, S. 353, allows either party in a class action suit to transfer the case to federal court if one plaintiff lives in a different state than the defendant. S. 353 was reported out of Committee by a vote of 11- 7, and received the support of all Committee Republicans as well as the Democratic Cosponsor Herb Kohl (D-WI). All other Committee Democrats opposed the measure.

A number of amendments were considered during the markup. Senate Judiciary Chairman Orrin Hatch (R-UT) offered an amendment, accepted by voice vote, that eliminates caps on attorneys fees and raised the threshold for shifting cases to federal court from $75,000 to $2 million. In addition, amendments to exempt tobacco and gun manufacturer lawsuits from the reform measure were offered and defeated.

The House of Representatives narrowly passed companion legislation (H.R. 1875) last year, but President Clinton has threatened to veto the legislation. Although it is unclear whether the measure will be able to clear the procedural hurdles necessary to reach the Senate floor prior to adjournment, NRF will continue to aggressively work to advance this important legislation through the legislative process.

For the second time in one month, Senate Democrats attempted to attach a portion of the House-passed Dingell-Norwood managed care bill during consideration of the Labor-HHS appropriations bill. Senators Dorgan (D-ND) and Kennedy (D-MA) offered a provision from the Dingell-Norwood measure that would extend every health plan mandate to all insured Americans. The original Senate-passed legislation would only require self-insured plans (those covered by ERISA) to adhere to the mandates since States already regulate all other plans. Senate Republicans narrowly defeated the Dorgan/ Kennedy amendment by a vote of 47-51. It was supported by every Democrat and four Republicans -- Senators Specter (PA), Chafee (RI), McCain (AZ) and Fitzgerald (IL).

In response to the Democratic effort, the Republicans countered with their version of patient protection legislation. The measure considered by the Senate last night largely mirrored the most recent Republican offer to Democratic Conferees, and included a broad array of health care mandates, along with an internal and external appeals process and a limited right to sue. This amendment, offered by Senator Don Nickles (R-OK), passed by a vote of 51-47. Every Democrat and the four above-mentioned Republicans opposed the Nickles amendment.

With the House-Senate Conference Committee currently stalled in its negotiations over managed care reform legislation, it is unclear how the issue will progress in the coming months. However, given the intense political nature of the issue, NRF strongly encourages you to contact Members of Congress to encourage them to oppose the Dingell-Norwood legislation and any measure that would expose employers to medical malpractice liability.

If you have questions, please contact Katherine Graham Lugar at 202-783-7971.

Washington Retail Insight is published by the National Retail Federation, 325 7th Street, NW, Suite 1000, Washington, DC 20004. Please contact Mike Epstein at (202) 783-7971 or e-mail with comments, suggestions, or for subscription information.