American Independent Business Alliance

AMIBA Endorses Reintroduction of Marketplace Fairness Act

AMIBA Endorses Reintroduction of Marketplace Fairness Act

February 14, 2013

The Honorable Mike Enzi                                       The Honorable Richard J. Durbin
379A Russell Senate Office Building                        711 Hart Senate Office Building
Washington, DC 20510                                          Washington, DC 20510

The Honorable Lamar Alexander                             The Honorable Tim Johnson
455 Dirksen Senate Office Building                         136 Hart Senate Office Building
Washington, DC 20510                                           Washington, DC 20510
Dear Senators Enzi, Durbin, Johnson and Alexander,

We co-direct the American Independent Business Alliance (AMIBA), a nationwide network of 88 Independent Business Alliances serving 30,000+ community-based businesses in communities across the United States.

On behalf of AMIBA, thank you for sponsoring the Marketplace Fairness Act. We ask you to push this bill through to help level the playing field for the many small businesses we represent who are hobbled by the status quo. When remote retailers are effectively subsidized by being exempted from sales tax collection duties imposed on storefront businesses, government is obstructing genuine market competition. This occurs at great cost to our constituents and to the communities in which they do business.

Exempting large online retailers from sales tax collection duty gives these companies an effective 4 to 11 percent government-created subsidy (see below) with which they can undercut brick and mortar businesses – a handicap that equals the net profit margin for many commodity goods.

Damage also is done to lower-income citizens who do not enjoy the luxury of credit cards and secure delivery addresses, and to communities losing critical revenue to support local infrastructure. This infrastructure includes roads, airports, police and other services without which internet retailers could not deliver their goods.

Passage of the Marketplace Fairness Act will enable retail competition to be based on who can provide the best value to customers, rather than who enjoys government favors. The 1992 Quill v N. Dakota Supreme Court ruling that created the unfair playing field of today is an antiquity. It represents an era in which online shopping did not exist and computation of tax rates across thousands of jurisdictions was a daunting affair. Neither condition applies today, though we encourage exempting from interstate tax collection duties retailers doing less than $500,000 to $1 million in annual interstate sales.

Our position is presented in greater depth in our previous commentary in Bloomberg/BusinessWeek. We look forward to contributing any perspectives or spokespeople from among our constituents that may help you succeed in passing this crucial legislation.

Sincerely,

Jeff Milchen, Jennifer Rockne
Co-Directors

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