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Let's Make This Is The Last Holiday Shopping Season Without E-Fairness

This holiday season, small business owners in Minnesota and across the country are sending a single wish list to members of Congress

This holiday season, small business owners in Minnesota and across the country are sending a single wish list to members of Congress: close the online sales tax loophole, giving all retailers the chance to compete on a level playing field. Local employers are at a severe disadvantage to out of state online-only retailers, especially at this time of year--the busiest and most important season for small retailers.

Today, all local businesses are required to collect and remit sales taxes from customers, while many online retailers without some type of physical presence in Minnesota like Overstock and eBay are not required to do so.  While the Minnesota Legislature passed e-fairness earlier this year, out of state retailers without a presence in the state have a substantial pricing advantage against local small businesses, who cannot compete when the government essentially gives their competitors at least a 6.875 percent pricing advantage.

In September, retailers were encouraged when U.S. Representative Bob Goodlatte, chairman of the House Judiciary Committee, released 'Basic Principles on Remote Sales Tax,' which will serve as a framework for a conservative solution to finally close the online sales tax loophole. The release of these principles shows Chairman Goodlatte's strong commitment to ending the preferential tax treatment for online-only retailers at the expense of main street retailers.   While this is a positive step in the right direction, business owners are calling on Congress to take swift action by drafting legislation based on these principles and passing the bill in the U.S. House of Representatives.

"This needs to be the last holiday shopping season local retailers operate under this disadvantage in Minnesota and across the country," says Minnesota Retailers Association President Bruce Nustad. "At the state level, we have done our job to address this serious issue for retailers, now Congress needs to get e-fairness passed." 

The U.S. Senate, with leadership from Senators Amy Klobuchar and Al Franken, acted on e-fairness legislation earlier this year, when it passed the Marketplace Fairness Act by a wide, bipartisan vote, and a companion bill in the House already enjoys the support of over 60 bipartisan co-sponsors.  A recent study conducted by President Ronald Reagan's economist, Art Laffer, showed that e-fairness legislation coupled with state tax cuts would increase our nation's prosperity and employment-resulting in 1.5 million jobs in the next 10 years and creating an additional $563.2 billion in Gross Domestic Product (GDP). 

Governors, small business owners, and free market conservatives across the country have expressed their support for e-fairness legislation and agree that Congress needs to pass e-fairness legislation to give states the ability to collect these taxes online, as soon as possible.

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About the Author

Bruce Nustad

Bruce Nustad is president of the Minnesota Retailers Association.

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