Ohio Indie Retailers Urge Speaker Boehner to Consider E-Fairness

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With sales tax fairness now tabled in the U.S. House of Representatives, at least until Congress begins anew in January 2015, 17 small business owners representing 21 stores in Ohio expressed strong disappointment in a letter to House Speaker John Boehner (R-OH) regarding his lack of support for sales tax fairness.

“Regrettably, Ohio Main Street businesses are beginning yet another holiday season in which large, out-of-state businesses will enjoy an unfair competitive advantage because they are allowed to shirk their obligation to collect and remit sales tax,” the business owners wrote in the December 11 letter. “We urge you to take action to ensure that this holiday season is the last one in which the government subsidizes our out-of-state competition.” (Read the letter in full below.)

Last week, a group of House representatives and advocates met with Speaker Boehner in a last-ditch effort to bring sales tax fairness legislation to the floor for consideration, as reported by Roll Call. However, their efforts proved unsuccessful, ultimately ending any chance for passing e-fairness legislation in the lame-duck session.

In the letter to Speaker Boehner, the retailers wrote: “The crux of the e-fairness issue has been grossly misrepresented…. Over the past few weeks, e-fairness has come under some fire, from the assertions of Sen.Ted Cruz (who calls e-fairness a new tax on the Internet) to the protests of NetChoice (whose corporate online retail members, such as eBay, have a vested interest in maintaining the current status quo). However, it is telling that our opponents believe that the key to winning the debate is by grossly distorting the issue.”

The indie owners continued, “Contrary to Sen. Cruz’s inaccurate assertions, defeating federal e-fairness legislation won’t end taxes on Internet purchases. That’s because e-fairness legislation does not institute a new tax on online sales. Forty-five states already collect sales or use tax, and that won’t change.”

The retailers stressed that e-fairness legislation would level the playing field by stipulating clearly what entity is responsible for collecting a tax that is already owed: the retailer or the consumer. Many people still do not know they owe a tax when sales tax is not collected by the retailer and thus fail to comply with the law, putting them at risk of state audits.

In conclusion, the retailers wrote: “Mr. Speaker, small businesses like ours are the engines that drive Ohio’s economy. So we find it confounding when our lawmakers, the ones who are supposed to represent constituents like us, proclaim their opposition to e-fairness as if it is the right thing to do for our state. Nothing could be further from the truth. The status quo serves only to embolden our out-of-state competitors and hurt both Ohio businesses and the communities in which they reside. This problem won’t be solved by twisting the issue or ignoring the facts.”

Read a related story on this topic.


LETTER FROM OHIO RETAILERS TO SPEAKER BOEHNER

December 11, 2014

The Honorable John Boehner
Speaker of the House
United States House of Representatives
Washington, DC 20515

Dear Mr. Speaker:

Regrettably, Ohio Main Street businesses are beginning yet another holiday season in which large, out-of-state businesses will enjoy an unfair competitive advantage because they are allowed to shirk their obligation to collect and remit sales tax.  On behalf of the undersigned Ohio-based small businesses, we urge you to take action now to ensure that this holiday season is the last one in which the government subsidizes our out-of-state competition.

We strongly urge you to allow the U.S. House of Representatives to consider the issue of e-fairness, which has wide-ranging and bipartisan support. States should be allowed, if they so choose, to require remote retailers to collect and remit sales tax on purchases made in their state.

The crux of the e-fairness issue has been grossly misrepresented by our opponents, whose businesses enjoy the unearned competitive advantage of allowing their online customers to “avoid” paying a sales tax. Over the past few weeks, e-fairness has come under some fire, from the assertions of Sen. Ted Cruz (who calls e-fairness a new tax on the Internet) to the protests of NetChoice (whose corporate online retail members, such as eBay, have a vested interest in maintaining the current status quo). However, it is telling that our opponents believe that the key to winning the debate is by grossly distorting the issue.

Contrary to Sen. Cruz’s assertions, defeating federal e-fairness legislation won’t end taxes on Internet purchases. That’s because e-fairness legislation does not institute a new tax on online sales. Forty-five states already collect sales or use tax, and that won’t change.

E-fairness legislation — such as the Marketplace Fairness Act in the Senate — would level the playing field by stipulating clearly what entity is responsible for collecting a tax that is already owed: the retailer or the consumer. When the retailer does not collect, the consumer is responsible for paying the tax on his or her purchases. However, many people do not know they owe a tax when sales tax is not collected by the retailer and thus fail to comply with the law. More and more, these consumers become subject to onerous audits as states seek to recoup lost sales tax revenue.

Retailers are best equipped to collect and remit sales tax to the states, and it is much easier to collect sales tax at the point-of-sale than via use tax. In addition, whether it’s because of distribution facilities or online affiliates that serve as virtual sales agents, it can be argued that most remote retailers have nexus in states already and should therefore collect sales tax on purchases.

We firmly believe the time has come for Congress to act. Any e-fairness legislation passed by Congress could make it even easier for remote retailers to collect and remit sales tax to states by requiring states to provide sales tax collection software to remote retailers at no charge and removing the threat of an out-of-state audit.

Taxes should be applied equally to consumer purchases, regardless of the channel through which the consumer chooses to buy. Today’s marketplace needs a modern sales tax collection system to reflect current retail realities. And we support efforts to provide robust audit and liability protection. It is time to level the playing field for all merchants.

Mr. Speaker, small businesses like ours are the engines that drive Ohio’s economy. So we find it confounding when our lawmakers, the ones who are supposed to represent constituents like us, proclaim their opposition to e-fairness as if it is the right thing to do for our state. Nothing could be further from the truth. The status quo serves only to embolden our out-of-state competitors and hurt both Ohio businesses and the communities in which they reside. This problem won’t be solved by twisting the issue or ignoring the facts.

The time has come to act. It is time to stand up for Main Street retailers. Let the House consider e-fairness now. 

Thank you for your consideration.

Sincerely,

Beck Paint & Hardware Inc.
Stanley J. Beck
718 E. McMillan St.
Cincinnati, OH 45206

Buckeye Running Company
Steve Nester, Owner
4200 Aero Dr.
Mason, OH 45040

Columbus Running Company LLC
Jim Jurcevich, Owner
6465 Perimeter Dr.
Dublin, OH 43016

Columbus Running Company LLC
1250 Hill Rd. North
Pickerington, OH 43147

Columbus Running Company LLC
50 N. State St.
Westerville, OH 43081

Columbus Running Company LLC
765-B N. High St.
Columbus, OH 43215

Deluxe Novelty
Mike Yeso
1 South Fifth St.
Martins Ferry, OH 43935

Excel Bike
Joe Missler
44 E Main St.
Norwalk, Oh 44857

Hiram College Bookstore
Shane Kardos
11730 Garfield Rd.
Hiram, OH 44234

Inscribed Books & Gifts
Tish Gayle, Owner
3914 Miami Rd., Suite 107
Mariemont, OH 45227

Joseph Beth Group
Matthew Gildea, Book Team Business Director
5030 Oaklawn Dr.
Cincinnati, OH 45227

Larson’s Toys and Games
Greg W. Larson
1617 W. Lane Ave.
Columbus OH 43221

Medina Funtastic Toyz
Edmund S. Wright, Owner
140 West Washington St.
Medina, OH 44256

My Little Red Wagon
Michelle Sahr
220 N. Main St.
Hudson, OH 44236

Naturally Curious Kids
Jerilyn Rademacher
13 E. College Ave.
Westerville, OH 43081

Off the Wagon
Michelle Sahr
152 E. Main St.
Kent, OH 44240

Once Upon A Time Toys
John Seelie
19285 Detroit Rd.
Rocky River, OH 44116

Team Cycling & Fitness
Geoffrey Thielmeyer
7765 Colerain Ave.
Cincinnati, OH 45239

The Bookshelf
Chris Weber     
7754 Camargo Rd.                         
Cincinnati, OH 45243

The Bookshop in Lakewood
Colin Brown
15721 Madison Ave.     
Lakewood, OH 44107

Up and Running
Susie Stein
6123 Far Hills Ave.
Dayton, OH 45459

Wauseon Ace Hardware
Jeff Rupp
1495 N. Shoop Ave.
Wauseon, OH 43567-1824