Debbie Schaeffer, president of Mrs. G TV and Appliances, in Lawrenceville, is in Washington, D.C., this week to lobby with the New Jersey Retail Merchants Association at the National Retail Federation’s annual Washington Leadership Conference.At the conference, more than 150 small-business owners and retailers from around the country have gathered to highlight some of the public policies that affect the retail industry, such as job creation, tax reform, patent trolls and health care.
“Health care continues to be a very big issue,” said John Holub, president of the retailers group. “We are still in the implementation stage of Obamacare.”
This year, the biggest emphasis is on the Marketplace Fairness Act, which the U.S. Senate approved Monday, bringing it a step closer to enactment. It’s the reason Schaeffer made the trip this year: The bill would allow states to require online vendors to collect sales tax on out-of-state purchases.
Consumers who shop online currently are required to declare those purchases on their state income tax forms, though few do. By not forcing online retailers to collect the tax, states lose out on about $23 billion every year, according to the National Conference of State Legislatures.
“I want to make sure the bill is passed,” Schaeffer said. “I want to meet with the delegates in Washington and tell them how local businesses are affected by this. If we didn’t have this disadvantage, we could grow our business and add more jobs.”
Schaeffer said that customers come into her store and ask if the third-generation, family-owned business can match an online price that is not charging sales tax.
“They want us to absorb that expense, and it’s not fair,” she said.
The law would only apply to sellers in states where they don’t have physical operations, and those sellers that have sales of at least $1 million. It requires states to simplify their sales tax laws in order to make multistate sales tax collection easy. Some opponents of the law have called the Marketplace Fairness Act a tax increase, but Schaeffer would disagree with that.
“Many customers don’t realize that they are required to pay the state taxes directly for their online purchases,” she said. “This isn’t adding a new tax. It’s a tax that is already required.”
The Marketplace Fairness Act has the support of the NJRMA.
“It is leveling the playing field once and for all,” Holub said. “Online retailers have been able to exploit a loophole that gives them a 7 percent advantage over brick-and-mortar stores. With the increased popularity of online sales, it is jeopardizing the health and vitality of Main Street.”