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NRF urges quick action on Internet sales tax legislation

The National Retail Federation and nearly 100 retailers and trade associations are asking Congress to approve legislation making it easier to require Internet merchants, mail-order houses and other "remote sellers" to collect sales tax across state lines.

"The states have made great progress," NRF and the other groups said in a letter to sponsors of the legislation. "We now call on Congress to respond to their efforts by passing this legislation."

"Brick-and-mortar retailers are currently required to collect sales taxes while many on-line and catalog retailers are not," the letter said. "This is not only fundamentally unfair to Main Street retailers, but it is costing states and localities billions in lost revenue. This further threatens vital public services including health care, education and public safety."

The letter was signed by 98 members of the Sales Tax Simplification Coalition, which includes individual retailers along with NRF, a number of state retail trade associations, and other associations representing retail segments such as book stores, convenience stores, college stores and shopping centers.
Coalition members are hoping to see action this fall on the Sales Tax Fairness and Simplification Act, which is pending in both the House and Senate. The measure would allow states that have implemented the Streamlined Sales and Use Tax Agreement to require that out-of-state merchants collect sales tax on merchandise sold to residents of their states.

Retailers would be compensated for the cost of sales tax collection, and collection could be outsourced to certified service providers. Retailers with less than $5 million in annual gross remote sales would be exempt.

The Streamlined Sales and Use Tax Agreement, which simplifies sales tax law and creates a mechanism for collection and distribution across state lines, was developed in 2002 in response to a 1992 U.S. Supreme Court ruling that said remote sellers could only be required to collect sales tax from customers in states where they have a physical presence.

With more than 7,600 state and local jurisdictions collecting sales tax – many with different rates, different lists of taxable items and different definitions – the court held that out-of-state merchants could not be expected to know what to collect.

The agreement went into effect on a voluntary basis in 2005 but passage of federal legislation is needed before sales tax collection can become mandatory. At present, 22 states have passed legislation implementing the agreement. In addition, more than 1,000 companies have participated in the agreement voluntarily and have collected more than $125 million in state and local sales tax that would otherwise have gone unpaid.

Halloween sales looking to be more treat than trick
Halloween spending surpasses $5 billion

With the year's spookiest holiday approaching, consumers are looking to celebrate. According to the National Retail Federation's Halloween Consumer Intentions and Actions Survey, conducted by BIGresearch, consumers are expected to spend more on Halloween this year than last year, with the average person planning to spend $64.82 on the holiday compared to $59.06 one year ago. Total Halloween spending for 2007 is estimated to reach $5.07 billion.*

"Halloween should give retailers a nice boost in sales as they open the crucial fourth quarter." said Tracy Mullin, President and CEO of NRF.