After a yearlong deadlock, there's news on the legislation of online taxes. The National Retail Federation (NRF) welcomed the release of draft online sales tax legislation by House Judiciary Committee Chairman Robert Goodlatte, R-Va., saying action is needed to break Congress’ standstill on the issue. “Retailers should be allowed to compete based on how well they serve their customers, not according to tax policy determined by an out-of-date, quarter-century-old court decision, " NRF Senior Vice President for Government Relations David French said. Goodlatte's draft of the Online Sales Tax Simplification Act of 2016 enables states to take certain steps to require online sellers to collect sales tax.
Total Retail's Take: The battle over online sales tax legislation dates back 15 years. Under a 1992 Supreme Court ruling, online sellers can only be required to collect sales tax in states where they have physical presences (e.g., headquarters, storefronts, distribution centers). However, in an increasingly digital environment, the current legislation doesn't hold up. As a consumer, more taxes isn't my favorite idea. But for brick-and-mortar retailers competing against their online counterparts that don't have to collect sales taxes in some states, this legislation could make or break their businesses. I'm happy to see there's movement on it, but as with most things in Washington, I don't see a quick resolution in the cards.