By Renée Sunde, President/CEO
Last weekend’s sales results provided an important message hidden within the economic data.
In this case, though, the subtler message isn’t quite so hidden.
National retailers proclaimed a “very strong weekend” for sales from Thanksgiving through Cyber Monday. The turnout of an estimated 174 million shoppers through the weekend spent an average $335 per person.
But digging a bit deeper, we get to a subtler but important message. More consumers, an estimated 58 million, shopped only online compared to 51 million who shopped only in stores. The growing base of online shoppers generated double-digit percentage sales gains for online sellers compared to single-digit percentage sales gains for brick-and-mortar stores.
Many of those online shoppers were attracted not just by convenience but the chance to avoid paying sales taxes based on the states where they live. This message brings back a long-standing national debate about tax reform that would require online sellers to collect and remit sales taxes to the states where their shoppers live.
The price advantage offered by online sellers is directly tied to their ability to grow sales at a faster pace than traditional stores. The unfair advantage is that many online sellers are exploiting a legal loophole to forgo collecting sales taxes in states such as Washington. Collection of owed taxes for online sales could be applied to important Washington priorities, such as funding schools. Instead, state lawmakers have turned to new taxes to continue to meet the needs of our teachers and students.
For more than a decade, Congress has debated but not acted upon the need to mandate a level and competitive playing field for online and traditional retailers. Left unaddressed, we run the risk of unintentionally hurting brick-and-mortar retailers who no longer can compete in a marketplace with an unfair price advantage.
A bill to remedy the situation has twice passed the U.S. Senate. It now is time for the U.S. House of Representatives to step up to mandate marketplace fairness for all retailers. The wellbeing of our states, retailers and many who work in the industry depends on it.