The Retail Industry Association (RILA) voiced opposition on Tuesday that would codify a court decision barring states from collecting taxes from a business unless the business has a physical location in the state.
In 1992, the U.S. Supreme Court found in Quill Corp v. North Dakota that companies should not have to pay sales taxes on items shipped into states where they don’t have a physical presence. U.S. Rep. Jim Sensenbrenner (R-WI) introduced the No Regulation Without Representation Act, H.R. 2887, to codify the high court’s 1992 decision into federal law.
Jennifer Safavian, the executive vice president of federal government affairs at RILA, called the bill “a step backwards for retailers” that have worked “in good faith” with the House Judiciary Committee for the last four years to end special tax treatment for online retailers.
“Instead of updating our tax code to reflect modern-day commerce, the bill being debated (on Tuesday) would codify government picking winners and losers, and preserve a loophole that continues to distort free market competition,” Safavian said.
RILA, which represents more than 200 retailers, manufacturers and suppliers that total more than $1.5 trillion in annual sales, has said the bill would stifle innovation and retail growth.
“As the retail industry evolves to address modern consumer demands and a future that incorporates both digital innovation and physical storefronts, we urge lawmakers to reject this legislation and focus their efforts on creating a level playing field that gives all businesses a fair shot to compete,” Safavian said.