Fairness fight gaining ground

by Larry Meyer
MRA Chairman and CEO

Here’s an update on the fairness issue dear to retailers’ hearts and bottom lines. It’s also worth putting on your radar screen for possible grassroots action before the end of the year.

The news is that the national effort to bring sales tax fairness to Main Street—by enabling states to collect sales and use tax from “remote sellers” such as Internet and catalog merchants—continues to pick up momentum.

Last October, you’ll recall, MRA and other groups convinced state legislators to make Michigan the 20th state to join the Streamlined Sales Tax coalition. It was the first big victory in our decades-long struggle to level the playing field for Main Street retailers, who find themselves at an expensive, 6-percent disadvantage to remote sellers not required to collect sales and use tax.

Today, the number of states involved in the coalition has jumped to 35. That’s significant momentum.
Just as important, the group is making considerable progress on its work of simplifying states’ tax collection systems in order to facilitate voluntary collection and remittance by remote sellers.

The fact that nearly three dozen states have joined the movement is raising optimism that the effort will, indeed, be successful. And the more states that join, the better the chance that Congress will finally step up to the plate and give states the authority to collect from remote sellers who don’t do it voluntarily.

After such a long and often lonely struggle, all the new optimism is most welcome.

That’s not to say victory is at hand, however. At this point there are no guarantees.

There’s still a lot of work remaining as the coalition moves toward its final Interstate Agreement proposal. Any one of a number of concerns could yet knock the wheels off the buggy.

There are uncertainties and potential legislative battles still ahead here in Michigan, too.

When Governor Engler signed the legislation permitting Michigan to join the coalition, it was only the first step. The second step has always been legislative ratification of the interstate coalition’s final product.

Our hope has been that the coalition would finish before the end of this year, before a new governor and legislature were sworn in. That way, the measure would come before the same lawmakers who went through the 2001 battle and did the right thing.

That timing is looking more unlikely. Word from the coalition is that it will be early next year before there’s a product to bring back to the states.

Unfortunately, the law that gave Michigan its place at the coalition table expires on January 1. That means the current legislature will either have to renew the legislation or punt to the next one.

Our clear preference is for this legislature to act, either by approving the final agreement, if it’s ready, or by renewing Michigan’s authorization to remain at the negotiating table.

Your letters, calls and legislative testimony were effective a year ago when we mounted a vigorous—and successful—grassroots campaign for fairness. Now it’s time for all of us to gear up for another push this fall.

So get ready. We’ve made great progress in the past year, and we’re not going to ease up now.