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Brick-and-Mortar Backers Push MFA/IFTA Combo - Multichannel

Brick-and-Mortar Backers Push MFA/IFTA Combo

Say Congress Needs To Level Playing Field Among Retailers
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Backers of the Marketplace Fairness Act (MFA) are putting on a full-court press in Washington to try and get the bill passed in the lame duck Congress in combination with a temporary renewal of the Internet Tax Freedom Act (ITFA).

That "press" includes local and state government officials--mayors and governors among them--gathering for an event Dec. 3 at the Capitol Visitors Center to call on Congress to "stop stalling and take up Marketplace Fairness," according to a PR firm promoting the event. 

It also includes TV ads from the Alliance for Mainstreet Fairness (http://www.standwithmainstreet.com/) and the National Retail Federation airing in Washington that warn about the impact on brick-and-mortar retailers of not applying a sales tax to online retailers. That message includes the warning that small businesses will be threatened by online giants like China's Alibaba.com, complete with images of a Santa in front of a store with an "everything must go" sign and a mom and pop bakery threatened with going out of business.

The TV ads are running throughout the lame duck session, and there is also print, airport signage and digital radio.

MFA would allow states that had simplified their own sales tax laws to require online retailers to collect sales tax at the time of a the transaction. ITFA would extend the moratorium on taxing Internet access services--a bill cable ISP's applaud. The moratorium expires Dec. 11--it actually was scheduled to expire earlier this year, but was extended. Cable lobbyists are looking for IFTA to be renewed as part of a continuing resolution, which also must pass by Dec. 11 to avoid a government shutdown.

A Senate bill was introduced in July that combined the IFTA renewal with passage of MFA. That bill would continue to grandfather the seven states allowed to collect Internet access taxes, something a House version of the bill would not. That grandfathering is key for the small business backers.

In a letter to House and Senate leadership earlier this month, the National Association of Counties (NACo), joined by the National Conference of State Legislatures, the Council of State Governments, the National League of Cities, the United States Conference of Mayors and the International City/County Management Association called on Congress to pass the combination bill. They said it would level the playing field so that main street could compete with the info highway retailers.

The groups are not looking for a permanent IFTA moratorium--taxing Internet access could be a new revenue source for cash-strapped governments. But if a temporary renewal gets them the online retailers tax, they are OK with the package deal. Either way, passage of the MFA is a long shot at best.

“[The Marketplace Fairness Act] is straightforward and has lingered unresolved for too long," said NACo in that letter to the Hill. "It simply grants state and local governments the ability to enforce already existing sales tax laws while simultaneously leveling the playing field for the businesses that support our counties and local communities nationwide.  Counties would use this revenue for critical services such as infrastructure and public safety.  Services that not only residents rely on, but businesses on Main Street and online depend on them too when engaging consumers."

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