Shawn Massey, CCIM, SCLS

ICSC Launches www.21stCenturyRetail.org

ICSC Launches www.21stCenturyRetail.org

 

ICSC has launched a new website, www.21stCenturyRetail.org, which is designed to serve as a hub of information about sales tax fairness and how the current sales tax system is unable to support the modern retail marketplace. It will be continuously updated to provide the public, stakeholders, media and lawmakers with information on the online sales tax loophole and resources to help level the playing field for all retailers.

 

The website features information about the current Federal legislative push, a blog, reference material for the media and state-specific information, as well as video testimonials by local retailers from across the country who have been negatively impacted by the online sales tax loophole. Visitors will also have the opportunity to register for regular updates about new content, announcements, and the effort to promote sales tax fairness.

 

This website provides valuable resources for ICSC members and industry partners and supports their efforts to educate elected officials and the broader public on the need for Congressional action. Please encourage your friends and colleagues to visit the site and learn more about how our current sales tax system is hurting community-based retailers, consumers and state budgets.

 

Lack of Online Sales Tax Collection Continues to Stress States; The Time for Federal Action is Now

Recent state proposals to address sales tax collection by online-only retail companies continue to underscore the need for Congress to enact a solution for sales tax fairness.

 

As previously reported, Amazon.com has negotiated temporary sales tax collection exemptions in California, Tennessee and South Carolina in exchange for building warehouses in those states. It recently reached similar deals in Indiana (collection will begin in January 2014) and Pennsylvania (collection will begin in September 2012) and is expanding the effort to other states including New Jersey and Arizona. ICSC believes that a warehouse or distribution site satisfies the criteria for physical nexus and the subsequent obligation to collect sales taxes in the state. ICSC opposes states exempting Amazon from the sales tax collection obligation.

 

Legislation responding to such state economic incentive proposals has been filed in New Jersey, Vermont, Arizona and Virginia (among other states). The bills seek to clarify the nexus criteria and the seller’s obligation to collect and remit sales tax. Such legislation in New Jersey [S. 905 (Lesniak), S. 1305 (Sarlo), and A. 2003 (Singleton)] defines sellers responsible for collection of sales and use tax and clarifies the types of legal arrangements between remote retailers and in-state distribution centers that establish a significant nexus to trigger the sales tax collection obligation. If a remote retailer is engaged in business in a state through its distribution center, then it has a physical nexus in the state and should collect the sales tax like other in-state retailers. The bills are pending in the Senate Economic Growth Committee and the Assembly Appropriations Committee.

 

The full text of the New Jersey legislation can be found here: http://www.njleg.state.nj.us/2012/Bills/S1500/1305_I1.HTM

 

Anti-Eminent Domain Bill Passes House Committee
On January 24 the House Judiciary Committee approved (by a vote of 23-5) The Private property Rights Protection Act of 2011 (HR 1433). The bill may now be considered by the full House at any point during the remainder of the 112th Congress. This bill would withhold federal economic development funds from states and localities that use their inherent powers of eminent domain to take property for private economic development. A nearly identical bill was passed by the House in 2005 but was never voted on by the Senate.

 

The bill, introduced by Rep. James Sensenbrenner (R-WI), represents an effort to respond to the U.S. Supreme Court’s ruling in Kelo v. City of New London in which the Court upheld the power of states to condemn private property with the intent of turning it over to a new private owner who will then develop the property as the state desires. States and cities typically defend these condemnation actions by arguing that the taken property is “blighted” or otherwise harms the local economy. The Supreme Court agreed that stimulating economic development was a sufficient “public use” of the property to allow states to exercise their eminent domain power. This situation differs from the far more common condemnation action where the state takes private land and converts it directly to a public purpose (such as a road). In those cases, public access or public benefit is also used to justify the taking. In addition, many private entities (pipeline, common carrier and utility companies) have been granted their own power of eminent domain to secure rights-of-way necessary for efficient operations. HR 1433 specifically exempts these categories of condemnation. The U.S. Constitution already guarantees “just compensation” for the taking of property and that requirement would not be affected by this legislation.

 

In response to the Kelo decision, most states passed their own statutes to limit or clarify condemnation practices. However, some in Congress still believe a federal law is needed to discourage states from ever utilizing this aspect of their eminent domain authority. At this point, it is uncertain when (or if) HR 1433 will be presented to the full House for a vote. ICSC will continue to monitor this issue for further developments. For more information, contact Kent Jeffreys at kjeffreys@icsc.org.

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