Alabama’s local retailers support the Alabama Department of Revenue’s efforts to enforce the state’s sales tax laws equally.
In a direct challenge to the 1992 Supreme Court Quill decision that has allowed online retailers to evade collecting state sales taxes, the state of Alabama since January has required online-only retailers with more than $250,000 in Alabama sales to collect and remit the sales tax on purchases made by customers in the state. In response to almost $187,000 in Alabama assessments and fines, computer/electronics retailer Newegg Inc. recently filed an appeal with the Alabama Tax Tribunal to block enforcement of the law, according to a Tuesday story in the Consumerist. A statement from the Alabama Department of Revenue today confirms that the appeal was filed.
Local retailers defend the state’s right to collect the taxes from large, online-only retailers.
“Local retailers play by the rules and collect the state sales tax on every purchase, 365 days a year,” said Rick Brown, president of the Alabama Retail Association. “It’s time for large online retailers that sell into our state on a regular basis to follow the same rules. The state of Alabama is simply trying to enforce the law equally, so that no business gets a leg up on another based on special tax treatment.”
Brown notes that one reason the state of Alabama wants to challenge the decades-old Quill decision is the inaction in Congress on federal legislation to close the online tax loophole.
In 2013, the U.S. Senate passed the Marketplace Fairness Act, which would close the online loophole and require online sellers to collect the same sales tax as local businesses. Despite an overwhelmingly bipartisan vote, the U.S. House of Representatives has yet to consider similar legislation.
After three years, it’s clear that the state of Alabama is tired of waiting.
“Congress is still no closer to solving this problem, and thousands of Alabama businesses are put at a competitive disadvantage every day as a result,” said Brown.
“Until Congress acts, retailers support the efforts of our state to challenge the status quo and fight for a level playing field for local businesses,” said Brown. “Alabama law should be respected by all who do business in our state, and that includes online retailers that sell into Alabama.”
The Alabama Retail Association represents retailers, the largest private employer in the state of Alabama, before the Alabama Legislature and the U.S. Congress. Through sales of food, clothing, furniture, medicine and more, our 4,100 independent merchant and national company members touch almost every aspect of daily living. Since 1943, we’ve worked to promote what’s best for the retail industry in Alabama. Whether voicing the retail view when public policy is made, educating members about issues that impact them, negotiating rates for benefits and services or communicating the retail story, the Alabama Retail Association and its members are better together.