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Articles in Category: Policy & Politics

On Sales Tax Fairness, Congress Alone Can Finish The Job

Conservative Economist Laffer says taxing online sales would boost prosperity

The following commentary by MnRA's Bruce Nustad was published in the Star Tribune August 5, 2013.

Minnesota’s retail economy is important — 788,000 jobs depend on it. But many of those jobs are at risk because of a decades-old loophole that gives out-of-state, online-only retailers an artificial advantage over retailers in our communities. This is a problem that has plagued Minnesota retailers of all sizes, costing us local jobs and economic growth.

In May, following years of bipartisan Internet sales tax collection work by the Minnesota Retailers Association, the Legislature passed and Gov. Mark Dayton signed a new law designed to compel online-only retailers doing business in Minnesota to play by the same rules as local retailers.

But to truly close this loophole and restore basic free-market competition, we need Congress to act.

Some online retailers have made the business decision to sever relationships with Minnesota business partners in order to avoid collecting sales tax on transactions here. Many Minnesota Retailers Association members offer options for businesses dropped from affiliate programs. However, the long-term solution to this problem was endorsed by Amazon in its notice to affiliates ending their relationships — enactment of the federal Marketplace Fairness Act.

The Marketplace Fairness Act, already passed by the U.S. Senate but awaiting action in the U.S. House, represents tax reform that will be good for Minnesota’s retail diversity and our economy. It will end special treatment in the tax code for online retailers and give all businesses a chance to compete on price in a free market.

In a recently unveiled study, former Reagan administration economist Arthur Laffer emphasizes this important step in tax reform as “giving states the power to require online-only retailers to collect sales taxes as part of a transition to a more progrowth tax structure.”

Laffer — famously no fan of taxes — makes the conservative case for closing loopholes and lowering tax rates to spur economic activity and job growth.

Laffer’s study examines potential economic growth resulting from passing the Marketplace Fairness Act, concluding that Minnesota alone could see 24,760 new jobs by 2022 after closing the online sales tax loophole and allowing the state to lower tax rates.

And the Marketplace Fairness Act isn’t just good for Minnesota. Laffer projects an increase in the nation’s prosperity — 1.5 million new jobs in the next 10 years. That adds up to more than $563 billion in added gross domestic product.

Minnesota has done what it can at the state level to help our Main Street retailers. To finish the job, we need the U.S. House of Representatives to act. Laffer has provided a road map to prosperity for our lawmakers: close loopholes, lower tax rates and restore the free market.

E-Fairness and the Need for U.S. House Action on the Federal Marketplace Fairness Act

Amazon's affiliate decision highlights need for Congressional action

Amazon's recent business decision to drop its Minnesota affiliates in response to the new affiliate nexus law passed by the state Legislature underscores the need for Congressional action on this issue.

Earlier this year the U.S. Senate overwhelmingly passed the federal Marketplace Fairness Act and now it is time for the U.S. House of Representatives - with the support of our Minnesota delegation - to do the same.

Amazon's notice to affiliates voiced strong support for the Marketplace Fairness Act, and mentioned that the company will reinstate the Minnesota affiliate program once the Act is passed. The Minnesota Retailers Association looks forward to the return of the affiliate program, and until then encourages Minnesota businesses seeking affiliate relationships to look to the many brick-and-mortar and online retailers that continue to offer similar programs.

Right now it is up to the U.S. Congress to end uncertainty for retailers by passing legislation that permanently ends special tax treatment for online-only retailers. We urge Minnesota's House delegation to support this important legislation, and to urge their leadership for a vote on this issue.

Senator Rest Named E-Fairness Champion

MnRA recognises Rest for support of marketplace fairness

After a multi-year effort to level the playing field for retailers, the Minnesota Legislature passed e-fairness in the final hours of the session.

At our 15th Annual Legislative Wrap-Up Golf Tournament last Tuesday, the Minnesota Retailers Association (MnRA) named State Senator Ann Rest an "E-Fairness Champion" for her commitment to seeing this legislation through the process and making it stronger along the way.

Senator Rest's efforts resulted in Governor Mark Dayton signing e-fairness in to law as part of the tax bill on May 23, 2013. Retailers thank Senator Rest for her efforts to revise Minnesota's tax code around today's business model while recognizing that a sale is a sale.  
The Minnesota Retailers Association is pleased to present Senator Ann Rest our E-Fairness Champion award for her work to level the playing field for our brick-and-mortar retailers. We recognize Senator Rest's leadership in a multi-year effort to educate legislators and Minnesotans about the need to modernize our sales tax system when it comes to treating all sales equally.  For her distinctive leadership on e-fairness, retailers across Minnesota say thank you.

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