“The retail industry—the largest private sector employer—is rapidly changing and evolving,” Stephen I. Sadove, the board chairman of the National Retail Federation, which urged lawmakers in a Monday letter to support the legislation, said, according to Publishers Weekly. “Retailers compete for customers on many different levels, distribution channels, and fronts, including service and selection, but they cannot compete on sales tax. Congress needs to address this sales tax disparity and allow retailers to compete freely and fairly. Retailers of all shapes, sizes and channels deserve a level playing field.”
Currently, online retailers without a brick-and-mortar presence in a state are not required to collect sales tax, even though consumers are technically required to pay the tax when they file their annual tax returns, Consumerist reports.
The passage of the legislation through the Senate marks a win for physical retailers, which have maintained that the current environment puts brick-and-mortar stores at a disadvantage, and cash-strapped municipal governments that could benefit from additional tax revenue.
The legislation will now move to the House of Representatives, where passage of the bill is less certain. President Obama has said, however, that he plans to sign the legislation if approved by the House, Publishers Weekly reports.
“The Senate’s overwhelmingly bipartisan passage of this legislation foreshadows the end of the special treatment of big online businesses at the expense of retailers on Main Street,” Bill Hughes, the senior vice president for government affairs at the Retail Industry Leaders Association, said, according to Consumerist. “After such a resounding vote in the Senate, we look forward to a constructive debate in the house to level the playing field for all retailers this year.”