The Wall Street Journal reports that large retailers such as Target, Wal-Mart, Best Buy, Home Depot, and Sears have joined the fight for the Main Street Fairness Act, which would level the playing field between online retailers that don’t have to collect sales tax and local retailers that do by allowing states to require online retailers to collect sales tax.
The article seems to cast the push toward Main Street Fairness as a fight between Amazon and “big-box” retailers that have to collect sales tax online because they have stores in states where their online customers are located. Many of the big-box stores mentioned in the article have reached out to affiliates that Amazon has dropped, and the article includes quotes from various spokespeople positioning Amazon and other retailers on opposite sides of the issue.
But a closer look at the issue reveals that the two sides aren’t so different as they appear. No one wants Amazon to be singled out as the only one required to collect sales tax online, and the problems with the affiliate nexus laws that affect Amazon disproportionately have been well documented.
What’s more, the article breezes right by small businesses, both on- and offline. Small businesses that rely on affiliate marketing for income have been disproportionately (and unintentionally) affected by affiliate nexus legislation—when such legislation passes, Amazon invariably ends its affiliate relationships in the state, and these small businesses lose their affiliate income. This has happened in Colorado, North Carolina, Rhode Island, and Illinois, and there’s every reason to think it will happen every time a state passes affiliate nexus legislation. (New York remains the sole exception, and only because Amazon decided to sue the state instead and therefore kept its affiliate relationships alive while the suit is ongoing.)
Local small retailers, too, are a huge part of reasons we support the Main Street Fairness Act. They are seeing more and more shoppers come into the store, ask questions of the clerks, and browse what’s on the shelves, only to go home and order their purchases online to save on sales tax. They are losing business because they have to collect sales tax and online retailers don’t, and it’s a simple matter of fairness to require online retailers to collect sales tax too.
The best solution for everyone is the Streamlined Sales Tax initiative—which, according to the New York Times, Amazon supports—and the Main Street Fairness Act, which would allow states to require all online retailers, not just those with affiliate marketing programs like Amazon’s, to collect sales tax.
Can’t we all just get along?