4 Kids Owner Advocates for Sales Tax Fairness

Indie retailers are continuing the essential work of delivering the message of sales tax fairness directly to their elected officials in Washington. Two weeks after the American Booksellers Association’s Sales Tax Fairness Advocacy Day in Washington, D.C., the Alliance for Main Street Fairness organized an advocacy day in Washington on Wednesday, November 16, for a diverse array of approximately 40 retailers. The retailers were there to express their support for two e-fairness bills, the Marketplace Equity Act, currently under consideration in the U.S. House of Representatives, and the Marketplace Fairness Act, in the Senate.

Among the retailers at the Alliance for Main Street Fairness event was Cynthia Compton, of 4 Kids Books & Toys in Zionsville, Indiana, who said the event was “excellent.” The night before the advocacy day's visits with legislators on Capitol Hill, the Retail Industry Leaders Association (RILA) held a working dinner during which the retailers were briefed about the two sales tax bills. “RILA was tremendously well prepared and provided us with sheets that compared the two bills,” Compton said. “There were a wide variety of retailers there, from bike stores, jewelers, pet store owners, and even specialty tea stores — all different kinds of businesses. I was fascinated by how much we have in common with other industries [regarding the effects of sales tax inequity].”

On Wednesday, participants gathered on the Hill at 8:30 a.m. to advocate on behalf of the two bills. The Marketplace Equity Act was introduced in the U.S. House of Representative by Rep. Jackie Speier (D-CA) and Rep. Steve Womack (R-AR). The Marketplace Fairness Act was introduced by Senators Lamar Alexander (R-TN), Richard Durbin (D-IL), Mike Enzi (R-WY), Tim Johnson (D-SD), John Boozman (R-AR), Jack Reed (D- RI), Bob Corker (R-TN), David Pryor (D-AR), Roy Blunt (R-MO), and Sheldon Whitehouse (D-RI). 

Both bills would provide states with the authority to require remote sellers to collect and remit sales tax in the state. Importantly, both bills include small-seller exemptions. In the Senate bill, a store would have to have more than $500,000 in remote sales nationally to trigger nexus in a state other than its own. In the House bill, unless a store has more than $1 million in remote sales nationally (i.e. Internet, catalog, and/or toll-free sales, but essentially Internet sales), or more than $100,000 in remote sales into any one state, a seller is exempt from collecting and remitting sales tax in other states besides its own.

Compton met with the staff of U.S. Representatives Todd Rokita, Dan Burton, Michael Pence, and the staff from the offices of Senators Daniel Coats and Richard Lugar. Compton reported that she was pleased to find out the staff and lawmakers were familiar with the sales tax fairness issue, and it “was amazing how quickly people in the room got it. I expected to have to do more case building, but obviously we had a very clear case to make. Some $300 to $400 million in sales tax revenue left on the table due to lost sales tax revenue [in Indiana].”

Compton added that in three of the meetings, “staffers stated, ‘You’re getting some traction on this issue’…. I was really very gratified. It reflects the prep work that ABA has done that they could immediately grasp the issue.”

Perhaps the biggest obstacle Compton faced during the day was that “every office had a misunderstanding that these bills impose or increase taxes. That makes everyone nervous. But I just said this is about the ease of collection. It’s taking the burden out of the consumers’ hands, so they don’t have to worry about reporting one or two sales. And we’re putting the [sales tax revenue] back into the system where it needs to go.”