The announcement recently that the nation’s largest electronics retailer will close 50 stores highlights the need to close a gaping tax loophole and restore fairness to the retail industry. The issue cuts to the very heart of foundational principles of free markets, level playing fields and fairness.

Most brick-and-mortar retailers – from the well-known giants all the way down to the smallest mom-and-pops – find themselves at a government-induced competitive disadvantage because of sales taxes. Most states require physical stores to collect sales taxes on the items they sell. Online retailers, however, don’t have to collect those taxes, giving them an automatic pricing advantage.

Last December, online retailer Amazon inadvertently drew attention to the issue when it offered customers an extra $5 off if they went to a local retailer, scanned product info for Amazon’s database, and bought the product directly from Amazon. The stunt drew attention to Amazon, but it also helped many in government to see how unfair the situation has become for brick-and-mortar retailers.

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