New York: Jewelers of America (JA), a jewellery retail representative body, has hailed the advancement of two tax bills that it says would put online retailers on an equal footing with their brick-and-mortar counterparts.

The two pieces of legislation — the Remote Transactions Parity Act (RTPA) and the Marketplace Fairness Act (MFA) — were recently reintroduced in Congress, the former in the House of Representatives and the latter in the Senate. They aim to correct a legal loophole that makes it difficult for states to collect sales and use taxes from online businesses, according to the bills’ proponents.

Use tax applies to purchases from out-of-state vendors that do not have a physical location. In such cases, it is technically the consumer’s responsibility to pay the tax that the retailer would usually pay its home state. However, enforcement of that tax has proven to be complicated for authorities.

As a result, while brick-and-mortar businesses collect sales and use taxes on purchases in their stores, many online and remote retailers do not, the JA said last week.

Under the new bills, states would be able to require remote sellers to collect the relevant sales and use taxes from their customers, rather than relying on consumers to pay the state directly. The RTPA in particular requires the state to provide software and other tools to make the collection process easier for remote businesses to implement, including audit protections and a transition period.

“The introduction of these bills sends a strong message to opponents of sales tax fairness that they are waging a losing battle,” said JA president David Bonaparte. “Competition between traditional retailers and the internet must be fair.”

He added that his organization would “continue pushing for sales tax fairness until Congress gets this done.”