The full version of this article was published in the Daily Caller, linked below:
By Nathan Mehrens
You don’t have to be an economist to know that Main Street retailers are struggling. Drive through any downtown or shopping district and you can see how the landscape has changed from a decade ago. Stores within our communities have faced increasingly tough competition from online competitors in recent years, but federal government rules are making it exceedingly difficult for local retailers to compete.
Since 1992, retailers without a physical presence in a state have enjoyed a competitive advantage over traditional brick and mortar stores, because the former are not required to collect sales taxes while the latter are. This obvious advantage for out-of-state retailers comes from the U.S. Supreme Court decision in Quill v. North Dakota, holding that while such taxes could be levied, they could only be done so if Congress authorized it under the Constitution’s Commerce Clause. This has resulted in a court-imposed benefit to out-of-state retailers at the expense of those holding down real estate on Main Street.
This twenty year old decision no longer reflects the reality of 21st century technology, which has removed most of the burdens from the calculation and remittance of online sales taxes. In today’s world, it harms Main Street business’ ability to compete on a level playing field with online competitors.
Now, Congress has a rare opportunity to take bipartisan action to correct this inequity and provide a roadmap for economic growth that will benefit the still growing Internet economy and brick-and-mortar retailers that are the backbone of our local economies.