By: Gina Luke, assistant director, Governmental Relations Division
Because lawmakers have been at home more than they’ve been in Washington over the past few months, many veterinarians have met with lawmakers in their districts to explain the importance of the Marketplace Fairness Act. Joined by other small-business owners all across the country, veterinarians have urged the House of Representatives to pass this crucial tax bill before they adjourn in December.
Veterinarians who run neighborhood clinics operate at a competitive disadvantage to Internet retailers because they must collect state and local taxes on any prescription, product or equipment they sell. Their online competitors are not obligated to collect these taxes since they typically operate out of state, which means many Internet retailers gain an unfair competitive edge over local veterinary clinics by being able to sell products at lower prices.
The Marketplace Fairness Act, which the AVMA supports, would require states to collect sales taxes from online purchases made anywhere throughout the country. The Senate passed its version of the online sales tax bill (S. 743) in May 2013 by a 69-27 margin, but the measure has stalled in the House despite calls by more than 300 organizations to take up this important legislation. Because of a 1992 Supreme Court decision, state governments currently can only tax retailers that have a physical location within their borders. State legislatures cannot compel out-of-state retailers to collect state taxes.
Every state needs revenue to pay for infrastructure and support public services, such as fire and police departments and public schools (including veterinary colleges). Each year, states lose billions of dollars when consumers do not remit the state and local sales taxes that are owed on purchases they have bought online. When tax revenue goes uncollected by Internet retailers, it hurts local veterinary practices and other small businesses and the local and state economies.
The AVMA will continue to press our nation’s elected officials to send the Marketplace Fairness Act to President Obama before the 113th Congress adjourns next month. Congress has considered similar legislation for more than a decade and has held more than 30 hearings on the issue. The time to act is now! Learn more.