Subject: District Constituent Seeking Support For HR 684—The Marketplace Fairness Act
As a constituent of yours and proud member of the World Floor Covering Association (WFCA), I urge you to support HR 684, The Marketplace Fairness Act. I live in the district, have a business in the district and, like other local businesses, I provide employment opportunities for other individuals who also reside in the district. Additionally, other WFCA members here are involved in the retail, distribution, installation, recycling and cleanup/removal of flooring products. All of us are adversely impacted by the disparity under the current sales tax requirements.
At present, a state cannot require out-of-state online sellers to collect the sales tax owed from its customers who purchase flooring product. Local brick-and-mortar stores, however, must collect the local sales tax, which ultimately affects the final price on all products. This discrepancy in price between online and brick-and-mortar retailers is appalling and in some cases, WFCA members see their products sold online on rival websites at 5% to 15% discount. Many online companies advertise this artificial price “discount” by stating that the consumer will not have to pay any sales taxes.
WFCA members are bearing the brunt of this tax loophole, and the advantages found in online purchases of carpets, wood and tile floors, leave our retailers suffering and struggling to stay profitable. Further, flooring purchases are considered one of the largest investments a homeowner can make in a remodeling or new home purchase, so even the slightest price advantage could mean hundreds of dollars. Compounding this problem, WFCA retailers experience a “halo effect” in their showrooms, in which a consumer uses our expertise and tests the product, but ultimately buys their floor online to save money. Since both local brick-and-mortar stores like and the out-of-state online seller use the same distribution channels, there is no local shipping cost advantage.
As a result of these loopholes and blatant exploitation of them by online sellers, the Senate passed a bill earlier this year that would create a level playing field. Under the bill both remote sellers, and brick-and-mortar retailers, are subject to same local and state sales tax laws requiring them to collect the sales tax that every consumer owes. The bill would streamline the current tax code, implement efficient and easy-to-use software to compute sales taxes across the country. The Marketplace Fairness Act, S. 743/H.R. 684, is currently awaiting action in the House Judiciary Committee and we urge you to support the bill and encourage Chairman Goodlatte to take the bill up in committee.
I greatly appreciate your time and consideration on the matter and I look forward to your response.