Supreme Court Decision is a Win for Small Businesses

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Supreme Court Decision is a Win for Small Businesses

On June 23, 2018, we sent a letter to the editors of The Virginian Pilot and Daily Press in response to the Supreme Court decision regarding online sales tax. It read as follows:

The merchant members of Retail Alliance, founded as the Retail Merchants Association Tidewater in 1903, enthusiastically applaud the Supreme Court decision to allow states to collect sales tax from online retailers selling to customers in states where the retailer does not have a physical presence. For decades, main street retailers – small and large – have been operating in an unlevel playing field competing against online giants who sell across borders with a significant tax-free advantage.

In 2012, our retail trade association made a strong gain for the Commonwealth of Virginia when we joined forces with Retail Alliance board member Sarah Pishko, owner of Norfolk’s Prince Books, and led a grassroots coalition of local retailers from across the state to advocate that Amazon collect sales tax in Virginia. The online giant had been operating with a physical presence of several warehouses in the state for years. Our two-year bruising legislative battle culminated in Virginia delegates and senators voting with local merchants to force Amazon to collect the state’s 5 percent sales tax. Today, the tax brings in approximately $23 million annually to Virginia’s budget helping pay for roads, education and health care.

The Supreme Court has now cleared a path for state legislators and Governor Northam to enact a fiscally responsible tax collection system for all online retailers. For consumers, this is not a new tax. Theoretically, consumers are required by law to pay sales tax on all their online purchases annually although this is rarely the case. A few years ago, a University of Tennessee study found that states collectively lose $11.3 billion in annual sales tax revenue from non-collection of online sales taxes.

The Retail Alliance is not simply advocating for new taxes. We are calling for fairness. Most of our members are small mom-and-pops that work long hours while paying their fair share of taxes. They have scratched and clawed in order to survive while online retailers are continuing to gain extraordinarily large shares of the consumer market. Moreover, let’s not forget that with over 100,000 retailers in Virginia, the retail industry is the largest employer in the state. It employs all age groups from teenagers to grandparents. If any of these retailers failed to collect and remit sales taxes they would be sent to jail.

To summarize, try this scenario: empty downtowns, empty town centers, empty shopping centers void of brick-and-mortar retailers. If the retail world operated with “online” purchases only, would the sales tax rules change then? We hope that Virginia lawmakers will consider this bleak picture when making a decision about online sales tax collection in the 2019 Session of the Virginia General Assembly.

Sincerely,

Raymond J. Mattes, III
Retail Alliance President/CEO

To read the published article in The Virginian Pilot on June 28, 2018, click here.

2018-07-24T15:44:23+00:00