E-fairness and the bike industry

March 07, 2016

Katy Hartnett, director of government relations

Image: Marcin Wichary

On March 3, PeopleForBikes and nearly 500 bicycle retailers across the country sent a letter to House of Representatives Speaker Paul Ryan asking him to bring e-fairness legislation up for a vote by the full U.S House of Representatives.

What is e-fairness and why is this important to the bicycle industry?

An element of the popularity of bicycling nationwide is a strong network of independent, locally owned bicycle retailers. Critical to the success and growth of bicycle retailers is passage of legislation that requires online retailers to collect sales taxes. “It's a heartbreaking experience when you provide great service, in a great location with an awesome selection for customers, only to argue over how they don't have to pay sales tax if they get the item online,” explained Lester Binegar, general manager of Colorado’s University Bicycles. “This is a constant issue with our business.”

Current sales tax regulations mandate that retailers collect sales tax on all sales, while online-only retailers are generally exempt. This puts brick-and-mortar retailers at a competitive disadvantage: they have to charge more than their online-only competitors. “Local businesses can out-service online retailers, but we are losing on price when they have this unfair advantage,” said Brandee Lepak of Arizona’s Global Bikes.

With passage of this legislation, a buyer would pay the same tax rate regardless of if the purchase is made at a local store, on a mobile device or from a computer. “We work on our business every day.” said Brian Cox, vice president of operations for Jax Bicycles in Orange County, California. “We provide a retail environment for our clients that engages, encourages, educates, and energizes their involvement in the lifestyle of cycling. All we ask for is a level playing field with our competitors; allowing Internet sellers to circumvent paying sales tax is unacceptable.”

We thank the hundreds of bicycle retailers who joined us in sending a strong message to Congress about the importance of the passage of the legislation to the growth of the bicycle industry in communities across the nation. The bicycle industry is not alone in urging Speaker Ryan to schedule a vote on e-fairness legislation. We urge Speaker Ryan to listen to the broad set of voices who support this bill.

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