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Congress must act now for sales tax equity.

The Supreme Court last week cleared the way for Congress to address a fundamental issue of fairness--fairness to local businesses, fairness to local property tax payers, and fairness to the nation's cities. The Court cleared the way for Congress to require out-of-state mail order firms to pay the same state and local sales taxes as all other local merchants.

The refusal of mail order vendors to collect and remit use taxes has cost state and municipal governments billions of dollars. The Court's ruling has removed any excuse for Congress to delay any longer. It is time to clarify the ability of the nation's cities and towns to require out-of-state vendors to collect and remit use taxes.

Local merchants hire local residents, pay local taxes, and collect sales taxes for local governments and states. How can it be fair for them to compete against out-of-state merchants that begin competing by paying no state or local taxes? Why should local property tax payers be forced to pay an unfair share?

NLC Past President Cathy Reynolds hosted a summit meeting of the leaders of the other state and local national organizations in Denver 5 years ago to reach agreement on a simple and effective bill for Congress to act upon. NLC has joined with local retailers and chambers of commerce for half a decade to urge Congress to clarify and affirm the authority of state and municipal governments to provide a level playing field.

Congress has refused, arguing that the Supreme Court is the appropriate forum to resolve municipal and state use tax concerns. Now the emperor has no clothes.

House Judiciary Committee Chairman Jack Brooks (D-Tex.) told NLC leaders in 1987 they would have to fashion a compromise bill that met the test of simplicity and fairness. He said he would be willing to take the lead in Congress to pass such a bill. Acting in good faith, the nation's governors, state legislators, mayors, and city and county elected officials responded. We delivered. Now it is Congress' turn.

Justice Stevens wrote in his opinion that the world has changed substantially in the 25 years since the Bellas-Hess decision held that cities could not impose sales taxes on out-of-state merchants. Now Stevens notes the "continuous and widespread solicitation of business within a state" makes it fair for a state or local government to collect a tax.

That's what the issue is all about: fairness. It is no longer fair to delay. It is time to help Chairman Brooks deliver.
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Publication:Nation's Cities Weekly
Article Type:Editorial
Date:Jun 8, 1992
Words:416
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