Retailers seek end to tax-free e-shopping

Nov. 23, 2012 at 5:32 PM
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WASHINGTON, Nov. 23 (UPI) -- Brick-and-mortar retailers are urging Congress to pass laws collecting sales taxes on Cyber Monday online purchases.

"This should be the last holiday shopping season that Main Street businesses have to compete on a playing field that is not level," said Alison Joseph, a spokeswoman for the Alliance for Main Street Fairness, which is made up of brick-and-mortar retailers and other supporters of the bill.

Cyber Monday refers to the Monday after Thanksgiving when many Americans return to work -- and their computers. Many online retailers offer steep discounts that day, the single largest for online shopping each year. Last year, consumers spent $1.25 billion on Cyber Monday purchases, The Hill said Friday.

Part of the reason the deals are cheaper is that most states and the federal government don't force online retailers to collect sales tax on most purchases whereas local retailers face stiff penalties if they don't collect the tax. Only online retailers with a physical presence in a state are required to collect the sales tax.

Several Republican governors have come out in support of a bill that would end tax-free online shopping, including New Jersey Gov. Chris Christie and Indiana Gov. Mitch Daniels, who say the measure isn't a new tax. It just allows states to collect what they're already owed while helping level the field for stores that employ thousands in their respective states.

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